CHM Blog

Realtor Market Insider February 1, 2021

February 1st, 2021 12:33 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                                                                     



(by Sigma Research)

RE Report

December sees surge in purchase agreement signings

Traditionally speaking, the holiday season is not when homebuyers flock to sign on the dotted line. But 2020 was a different animal, and the numbers are in. Pending home sales reached a record high for December as the unseasonable housing surge continued in markets across the country during the COVID-19 pandemic.

According to Realtor Magazine, pending sales were up 21.4% year over year in December, reaching the highest reading for a December on the National Association of REALTORS®’ Pending Home Sales Index. All major regions of the U.S. recorded double-digit increases annually.

While housing shortages continue the upward pressure, National Association of Realtor’s chief economist Lawrence Yun says,“Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale,” said Lawrence Yun, NAR’s chief economist. “There is a high demand for housing and a great number of would-be buyers, and therefore sales should rise with more new listings. This elevated demand without a significant boost in supply has caused home prices to increase and we can expect further upward pressure on prices for the foreseeable future.”

He projects that 2021 will see strong economic growth, with low mortgage rates and fiscal stimulus thrown into the equation — all as part of an elixir that could help increase existing-home sales. Yun predicts continued low mortgage rates that can help bolster existing-home sales to 6.49 million this year, which would be a 15% increase over the total 5.64 million sales from 2020.

Source: RealtorMag | 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

Mortgage rates are trending sideways so far today.  Last week the MBS market          worsened by -6bps.  This caused rates to remain          unchanged. We saw a good amount of volatility through the week.


 This Week's Rate Forecast:                                                                        Neutral

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

1) Stimulus: House Speaker Pelosi says that the House will shift gears and vote/pass a budget that includes $1.9T package later this week, which could be handled as a budget reconciliation in the Senate instead of a flat out stimulus package vote. Meanwhile, Republican Senators have sent a letter to President Biden outlining a smaller and more targeted stimulus plan in the $600B to $1T range, which they say they can move through the Senate.

2)Jobs:  We get a ton of job and wage-related data this week, culminating in Big Jobs Friday. ADP Private Payrolls, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, Unemployment Rate, U6 Underemployment Rate, Average Hourly Earnings, Non-Farm Payrolls, and internal employment components of ISM Manufacturing and Non-Manufacturing will all get plenty of attention from bond traders.

3) Central Bank: We will get the latest interest rate decision and policy statement from the Bank of England, their first since the Brexit agreement has been reached. We will also have plenty of Fed Speak from our Federal Reserve, here is this week's calendar:

  • 02/01 Bostic, Rosengren
  • 02/02 Williams, Mester
  • 02/03 Bullard, Harker, Mester, Evans, and Kaplan
  • 02/04 Daly

 This Week's Potential Volatility:                                                                        Average

While rates remained mostly unchanged last week, we did see a good deal of volatility.  This week we could see volatility spike toward the end of the week with the jobs data.  We could also see rate volatility in the unlikely event that something gets done on the stimulus front. 

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 by Richard Sardella MLO.100007700/NMLS 233568 on February 1st, 2021 12:33 PM



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