CHM Blog

Realtor Market Insider April 9, 2019

April 9th, 2019 9:23 AM by Richard Sardella MLO.100007700/NMLS 233568

Rates At a Glance
Mortgage Rates
Currently Trending
7 Day Mortgage
Rate Forecast
This Week's
Potential Volatility

Neutral

Neutral

Average
(by Sigma Research)
Realtor Report

NAR report tells all about today's buyers and sellers

The stats are in. Each year the National Association of Realtors puts put its Home Buyers and Sellers Generational Trends Report, and this year is no different. The report is based on a 129-question survey filled out by nearly 7,200 people who bought a home between July 2018 and June 2019.

What was found is that millennial buyers aren’t all that different from their boomer parents when reaching a certain age. Instead of flocking to luxury condo towers, 82% of them are clamoring for affordable, single-family homes, often in the suburbs.

“They tend to have three bedrooms and two bathrooms, and clock in at roughly 1,900 square feet. Median sold price: $250,000,” according to realtor.com's Clare Trapasso. She quotes the NAR’s research analyst Jessica Lautz: "All generations are pushed to the suburbs today for affordability and the types of amenities they're looking for. They're looking for places that are convenient to their jobs and friends and family and in the school district of choice.”

More than half of buyers surveyed, 51%, flocked to the burbs. An additional 20% chose small towns, while 13% picked rural areas. That means only 14% of buyers are buying homes in urban areas—barely up from 13% the previous year, even though millennials were the most likely to be city dwellers, at 17%, a slight increase from 15% last year.

So who is in the market? While the median buyer was 46 years old, millennials make up 37% of buyers with many of those being the leading edge of the age range. Boomers were the second-largest group of buyers, at 32%, followed by Gen Xers, at 24%, and the silent generation, at 7%. And a full third of all home shoppers were neophytes (first-timers.)

63% are married folk. But the report found that twice as many single women were buyers than their male counterparts, with many of them aged 54 and older. Unmarried couples made up 8% of buyers.

“The top reason for purchasing a property was a desire to achieve the American dream of homeownership,” says Trapasso. “About 29% of respondents cited this in the survey. Next up was wanting a bigger abode, at 9%; wanting to be closer to family and friends, at 8%; a job-related move, at 8%; a change in family circumstances, at 7%; and simply wanting to live in a nicer area, at 7%.”

Look for more data about today’s home buyers and home sellers by going to the realtor.com web site and clicking the “research and statistics” link.

This Week's Mortgage Rate Summary

How Rates Move:

Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgageand G-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 trending sideways to slightly higher this morning.  Last week the MBS market worsened by -2bps.  This was not enough to worsen mortgage rates or fees.  Rates were very flat throughout the week with increased volatility on Friday.

This Week's Rate Forecast: Neutral

Three Things: These are the three things that have the greatest ability to impact mortgage rates this week: 1) Trade 2) The Fed and 3) Inflation.

1) Trade: Trade talks will continue this week via teleconferencing. The bond market will be looking for more progress if any major milestones are confirmed; it could push rates higher. But if we get more vague outcome "it's going well" type of commentary then rates will move sideways.

2) Fed:We have a hectic week that will focus on Wednesday's release of the Minutes from the last FOMC meeting where they seemed to tilt more to the "dovish" side of policy. But we also hear from key members including Vice Chair Clarida and Governor Bowman.

3) Inflation: We will get a few essential readings this week including CPI, PPI, and import prices. But the bond markets will focus on our Headline CPI which has remained at the 1.8% (while Core has been above 2%). Given all of the recent economic data, the markets are not expecting this trend line to change. However, CPI across the pond is more of a wild-card with key readings from China and Germany.

Treasury Dump: We will be dumping our nation's debt into the markets with three auctions:

  • 04/09 3 year note
  • 04/10 10 year note
  • 04/11 30 year bond

This Week's Potential Volatility: Average

Trade talks and inflation numbers are the two events that have the ability to increase volatility and push rates higher. We'll be paying particularly close attention to the inflation numbers, specifically the CPI reading.

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.

About Richard Sardella

Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

About This Report And Disclosure Information

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.

MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.

Posted in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on April 9th, 2019 9:23 AM

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