CHM Blog

Real Estate Market Insider for January 3, 2022

January 3rd, 2022 11:39 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

Higher

Higher

High
(by Sigma Research)
Real Estate Report

Pending Home Sales level off after the prior month's spike.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 2.2.% to 122.4 in November. Year-over-year, signings slid 2.7%. An index of 100 is equal to the level of contract activity in 2001.

"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability."

Yun notes that housing demand continues to be high, explaining that homes placed on the market for sale go from "listed status" to "under contract" in approximately 18 days.

"Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year," he said. "These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season."

Yun adds that a countrywide surge of the omicron variant poses a risk to the housing market's performance, as buyers and sellers are sidelined, and home construction is delayed.

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: Higher

Mortgage rates are moving higher today. The MBS market improved by +10 bps last week. This was not enough to improve 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) Jobs 2) ISM and 3) Covid.

1) Jobs: We get a ton of jobs and wage related data this week which will culminate in Big Jobs Friday. The stronger the jobs data is, the worse it is for rates and the weaker the data is, the better it is for rates. This week we have JOLTS, ADP, Challenger Job Cuts, Initial Jobless Claims, Non Farm Payrolls, Unemployment Rate, U6 Underemployment Rate, Average Hourly Earnings, and Average Weekly Hours.

2) ISM: Last week we received some very solid regional manufacturing reports, this week the markets will focus on the national ISM Manufacturing PMI and the Non Manufacturing (services) PMI. Both of these reports contain vital inflationary data in their Prices Paid component and employment data in their index as well.

3) Covid: Last week we saw new all time high records almost each day. Manufacturing and port shut downs in China and other global exporters will be of great concern to macro economists as will restrictions and lockdowns domestically.

This Week's Potential Volatility: High

This morning we're seeing a selloff as markets catch up on the last two weeks worth of economic news. Volatility is high as trading volumes go back to normal.

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 January 3rd, 2022 11:39 AM

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