December 27th, 2021 11:13 AM by Richard Sardella MLO.100007700/NMLS 233568
Existing Home Sales Show Continued Pricing Gains
The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800)
Existing-home sales rose in November, denoting three consecutive months of increases, according to the National Association of Realtors®. Three of the four major U.S. regions reported growth in monthly sales, while the fourth region held steady in November. From a year-over-year perspective, only one region experienced a rise in sales as the three others saw home sales decline.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.9% from October to a seasonally adjusted annual rate of 6.46 million in November. Sales fell 2.0% from a year ago (6.59 million in November 2020).
Properties typically remained on the market for 18 days in November, equal to October and down from 21 days in November 2020. Eighty-three percent of homes sold in November 2021 were on the market for less than a month.
First-time buyers were responsible for 26% of sales in November, down from 29% in October and from 32% in November 2020.
Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in November, down from 17% in October and up from 14% in November 2020. All-cash sales accounted for 24% of transactions in November, equal to October’s percentage, and up from 20% from November 2020.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in November, equal to the percentage seen a month prior and equal to November 2020.
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 -21 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) Covid, 2) Domestic News and 3) Treasury Sales.
1) Covid: As the Omicron variant now has more reported cases in the U.S. than the Delta variant, the markets continue to focus on how global economies will function given the headwinds of restrictive movement, lockdowns and supply disruptions. China's Shannxi Province has 13M people on lockdown, Domestically, thousands of flights were cancelled as major airlines cannot get enough staff to work due to Covid cases surging among their workforce.
2) Domestic News: The biggest report of the week will be Thursday's Chicago PMI. The Richmond Fed Manufacturing and Initial Jobless Claims will also get the attention of traders.
3) Treasury Sales: This is the last week of dumping our debt into the market place in 2021. While these are shorter term note auctions, the level of demand that they receive will be of key importance to bond traders. Here is the schedule:
12/27 2 year note
12/28 5 year note
12/29 7 year note
This Week's Potential Volatility: Low
This morning we're seeing sideways movement with a low volume of trading. Volatility is low without major market news.
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.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.