Market Trends

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Did You Know?

- 10/11/22

The September jobs report on Friday showed the U.S. economy gained 263,000 jobs last month, with the unemployment rate falling to 3.55 to 3.7%.

“The labor market is too hot for the Fed. I think it keeps them on a pretty aggressive tightening path. I expect another 75 basis point hike in November. They can hopefully moderate and reduce the size of rate hike to 50 basis points in December,” said Kathy Bostjancic, chief U.S. economist at Oxford Economics, in an interview with MarketWatch.

Inventory is still at record lows, the flow of new for-sale listings coming on the market remained anemic, down 16.2% from last year, much like August’s 16.5% year-over-year decline.

Did You Know?

- 07/07/22

Mortgage rates this week jumped by the largest amount in 35 years, making home-buying significantly more unaffordable in just seven days. The rate on the 30-year fixed rate mortgage surged to 5.78% from 5.23% last week, according to Freddie Mac, marking the biggest one-week increase since 1987 and hitting the highest level since November 2008. The average rate is more than two and a half points higher since just the start of the year. (Yahoo Money)

— Here is what Jerome Powell had to say….”We are watching it to see what will happen. How much will it really affect residential investment? Not really sure. How much will it affect housing prices? Not really sure. Obviously, we are watching that quite carefully…It’s a very tight market. So prices might keep going up for a while, even in a world where rates are up. So it’s a complicated situation and we watch it very carefully. I'd say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again."

The U.S. stock market met popular criteria for a bear market this week as the latest declines by the S&P 500 took the U.S. large-cap benchmark down by more than 20% from its record close in January. Investors, no doubt, are wondering how far stocks might fall from here, and what to do next. Fears that drastic rate hikes may trigger a recession in the next year are hanging over markets, analysts say. (Marketwatch)

Did You Know?

- 01/12/22

The average rate for a 30-year loan was 3.22%, up from 3.11% last week, according to Freddie Mac. A year ago, mortgage rates stood at 2.65%. Mortgage rates are still low by historical standards, and with strong buyer demand for homes, housing economists don’t anticipate an immediate or significant pullback in home sales. The average rate on a 30-year fixed-rate mortgage from 2011 through the end of 2021 was 3.85%, (WSJ)

Private job growth totaled 807,000 for the month, well ahead of the Dow Jones estimate for 375,000 and the November gain of 505,000 according to ADP. Hiring was broad-based, though leisure and hospitality led with 246,000 new positions. Businesses with 500 or more employees accounted for the bulk of the gains in December, adding 389,000 jobs. (CNBC)

If home prices escalate just 2.8% this year (as many predict)and each year thereafter for the next 10 years, home prices could rise about 32% in the next decade.

Did You Know?

- 10/25/21

Demand for single-family rental homes is showing no sign of easing up, and that is pushing rents through the roof, especially for the highest-priced properties. Investors are now flooding into the market again, after falling back a bit during the first year of the Covid pandemic. Nationally, rents rose 9.3% in August, year over year, up from a 2.2% year-over-year increase in August 2020. There are several reasons for the investor demand:

Worldwide bond yields are at historic lows, and investors need yield.
Inflation is on the rise, and most investors view rental homes as an inflation hedge.
Record high rent growth is supported by high occupancy rates.
Renters have demonstrated that they are willing to pay a premium to rent in a new home neighborhood managed by a professional landlord.

(CNBC)

While refinance originations could drop 62% in 2022 to $860 billion, mortgage originations for the purpose of buying a home are forecast to rise 9% to a new record of $1.73 trillion in 2022. (CNBC)

The average 30-year fixed mortgage rate rose to 3.05% last week, according to Freddie Mac, the highest level since April though still low by historical standards. The shift means home buyers are better positioned to negotiate a lower interest rate since higher rates reduce the number of re-fi's allowing homebuyers to be more attractive to bankers.... (WSJ)

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