CHM Blog

Home Prices Edge Higher

According to the National Association of Realtors, the national median single-family existing-home price edged up by 3.5% to $391,700.

2023 ended the year on an upswing with 189 out of 221 metro areas enjoying an increase in single-family existing-home sales prices from the previous quarter.

The report also highlighted that 15% of the markets experienced double-digit price appreciation, an increase from 11% in the prior quarter. Despite challenges such as limited inventory, NAR Economist Yun remains optimistic about the future as “increased homebuilding, along with lower mortgage rates, will not only improve housing affordability but also help bring more homes on to the market in 2024.”

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market worsened by -30 bps last week. This may have been enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) The Fed and 3) Retail Sales.

1) Inflation: Last week the BLS completed their annual recalibration (called a "seasonal adjustment") of how they calculate CPI. Now, this week we will get CPI on Tuesday and PPI on Friday. The CPI can have a major impact on rates.

2) The Fed: The bond market will continue to try to hedge their bets on the timing of a change in policy from the Federal Reserve. Here is this week's speaking schedule:

02/12 Kashkari, Barkin

02/14 Goolsbee, Barr

02/15 Bostic, Waller

02/16 Daly, Fed's Monetary Policy Report.

3) Retail Sales: After a big pull back in Consumer Credit, there is concern over this week's Retail Sales report for January with the headline expectations looking for a contraction of -0.1%.

This Week's Potential Volatility: High

This morning markets are moving sideways without any major economic news. Volatility has started low but will increase later in the week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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