CHM Blog

New Home Sales up 19.3% over last 12 months:

Sales of new single family houses in January 2022 were at a seasonally adjusted annual rate of 801,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

The median sales price of new houses sold in January 2022 was $423,300. The average sales price was $496,900.

The seasonally adjusted estimate of new houses for sale at the end of January was 406,000. This represents a supply of 6.1 months at the current sales rate.

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 lower today. The MBS market worsened by -6 bps last week. This was not 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) Geopolitical, 2) Central Banks and 3) Jobs.

1) Geopolitical: The geopolitical uncertainty created by the military conflict in Ukraine and the partial removal of Russia from SWIFT along with other sanctions are driving international funds into U.S. bonds.

2) Central Bank: Russia's Central Bank raised their interest rate from 9.5% to 20.0% and Ukraine's Central Bank announced the issuance of War Bonds. We get key interest rate decisions from Canada and Australia this week. From our own Federal Reserve, we hear from Fed Chair Powell twice (Wed and Thurs) as he gives his semiannual testimony to Congress. We also get the Fed's Beige Book which is prepared in advance of the next Fed meeting.

3) Jobs: We get a ton of job and wage related data this week that culminates in Big Jobs Friday which includes Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more.

This Week's Potential Volatility: High

This morning we continue to see fear pressure rates lower. Volatility is high as headline news drives uncertainty.

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.

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