November 28th, 2022 2:26 PM by Richard Sardella MLO.100007700/NMLS 233568
The Average Home Size in every State:
Over the last century, the average home size in the U.S. has skyrocketed. In 1949, the typical single-family home was just 909 square feet—by 2021, it had shot up to 2,480 square feet.
According to The 2022 American Home Size Index the shift towards larger homes was exacerbated by the COVID-19 pandemic when concerns over social distancing and remote work led many to relocate from urban areas to suburban and rural neighborhoods. In one September 2019 survey, 53% of respondents said they preferred to live in a community where the houses are larger and farther apart, with schools, stores, and restaurants several miles away. By July 2021 that figure had risen to 60%.
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: Higher
Mortgage rates are moving higher today. The MBS market improved by +48 bps last week. This was enough to decrease mortgage rates or fees. The market experienced moderate 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) Jobs and 3) The Fed.
1) Inflation: We will get the Fed's preferred key measure of inflation (Core PCE) on Thursday. Expectations are that it will continue to "5 handle" in the 5.0 to 5.1% range. The headline PCE is expected to remain at 6.2%
2) Jobs: We get a ton of job and wage related data all throughout the week with JOLTS, ADP, Initial Claims and Challenger Job Cuts. Then we get into Big Jobs Friday with Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings, U6 Underemployment and the Labor Force Participation Rate.
3) The Fed: We have a pivotal week from the Fed. Last week, it is clear that market sentiment shifted to expecting the Fed to move to a slower pace of rate hikes and at a smaller scale per meeting after digesting several statements from key Fed members. This week we have the Beige Book which is released exactly 2 weeks from the next FOMC meeting/decision. We will also hear from Fed Chair Powell and many other speakers prior to the media blackout period that starts on Monday leading up to their meeting.
This Week's Potential Volatility: High
This morning markets are under pressure. Volatility has started low but will spike on key economic data this week.
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.