CHM Blog

Real Estate Market Insider February 7, 2022

February 7th, 2022 11:30 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

Higher

High
(by Sigma Research)
Real Estate Report

69% of Home Owners Say Now is Good Time to Sell.

A monthly survey from Fannie Mae showed home purchase sentiment dipped in January but on the seller's side it increased.

The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 2.4 points to 71.8 in January, its lowest level since May 2020, as affordability constraints continue to weigh on the housing market.

In January, 25% of respondents reported that it’s a good time to buy a home, compared to the 69% of consumers who reported that it’s a good time to sell. Consumers also reported greater concerns about job stability and the future path of mortgage rates. Year over year, the full index is down 5.9 points.

“Consumer sentiment toward housing softened further in January – the HPSI fell 2.4 points to 71.8 – as affordability and supply constraints continue to limit home purchase opportunities, particularly among younger households,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.

“Younger consumers – more so than other groups – expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism. Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined. All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed. On the whole, the latest HPSI results are consistent with our forecast of slowing housing activity in the coming year.”

This Week's Mortgage Rate Summary

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 -85 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Higher

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

1) Inflation: We get a big report on Thursday with the Consumer Price Index. After Friday's big jobs beat, a hot CPI report will put extra pressure on rates. The consensus estimates call for the headline YOY CPI to rise from 7.0% to 7.2% and Core CPI YOY to rise from 5.5% to 5.9%. None of those readings would be good for rates.

2) The Fed: As the market continues to hedge for either a 1/4 or a 1/2 point rate hike next month, we will be very focused on any Fed-Speak as it pertains to rates and the timing of their QT.

3) Treasury Sales: Here is this week's schedule:

02/08 3 year note

02/09 10 year note

02/10 30 year bond.

This Week's Potential Volatility: High

This morning markets are moving sideways. Volatility will be high this week with CPI.

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 30 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 by Richard Sardella MLO.100007700/NMLS 233568 on February 7th, 2022 11:30 AM

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