CHM Blog

Realtor Market Insider December 7, 2020

December 7th, 2020 1:42 PM 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

Neutral

Average
(by Sigma Research)
RE Report

Homebuyers increasingly opting more room, higher-priced homes

It seems the appetite for high-end single-family homes is surging across the U.S., according to a report Thursday from real estate data provider HouseCanary.

According to Realtor’s Liz Lucking, between the start of the coronavirus pandemic in March and the end of November, the number of single-family detached homes priced above $1 million to have entered contract jumped 28.8% compared to the same period last year.

“The increasing popularity for luxury homes was followed closely by those priced between $600,000 and $1 million, which have seen their contract numbers increase 26.3% over the same time,” she says, according to the report.

At the same time, single-family homes priced below $200,000 have seen contracts fall by 13.7% compared to last year, underlining the increasing desire for buyers to upgrade to larger homes with more amenities. With Americans spending more time at home and working remotely, homeowners are yearning for more square footage, home offices, more outdoor space, and features that are usually accompanied by a steeper price tag.

Lucking quotes Jeremy Sicklick, co-founder and CEO of HouseCanary: “We anticipate that the housing market will maintain the status quo through year-end, but there is strong potential for a significant shift in the new year. For now, outsized demand from home buyers is motivating sellers to maintain active listings and pushing prices on closed listings to record highs across the country.” He goes on to say that despite a turbulent election and a seasonal slowing of housing market activity, elevated demand levels continue to drive the housing market’s recovery and have largely offset the steep drop-off in new listings, contracts and closures observed recently.

Source: Realtor | TBWS

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

Rates are trending sideways this morning.  Last week the MBS market worsened by -29bps.  This was enough to move rates or fees higher last week. We saw moderate volatility through most of the week.  As expected, rate volatility spiked on Friday with the jobs numbers.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates. 1) Stimulus, 2) Central Bank, and 3) Geopolitical

1) Stimulus: The ebb and flow of talking points and discussions will continue to influence bond yields, just as it did last week. For now, it appears both sides are willing to push through a $908B package that is also bundled with a new "kick the can" spending Bill that would keep the U.S. government from a shutdown.

2) Central Bank: We will get key interest rate decisions and policy statements from the Bank of Canada and the European Central Bank. The most focus will be on the ECB and any further discussion of their bond purchase program.

3) Geopolitical: Front and center is Brexit. Yes...it's still out there. There has been a barrage of news over the weekend as the deadline for a Brexit trade deal (Aka a "soft" Brexit) quickly approaches with British PM Johnson vowing NOT to further extend the deadline past December 31 and both parties threatening to pull out of negotiations. If that came to pass, it would be considered a "hard" Brexit and spell a major economic upheaval for the entire European region.

Treasury Dump: Here is this week's Treasury auction schedule.

  • 12/08 3 year note
  • 12/09 10 year note
  • 10/10 30 year bond (most important of the week)

This Week's Potential Volatility: Average

There's not a lot of economic data to worry about this week that will likely move rates. Instead, rate markets will be paying close attention to the details of the stimulus deal and continuing the Brexit saga. Of course, the 30-year bond auction could affect rates depending on how it's received.

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 27 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 in:General
Posted by Richard Sardella MLO.100007700/NMLS 233568 on December 7th, 2020 1:42 PM

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