June 14th, 2021 10:46 AM by Richard Sardella MLO.100007700/NMLS 233568
Willing buyers and confident sellers continue to change real estate as we know it
There is the price you’d think it would be, the price the sellers are asking for it, and the price it ends up at. When buying a house these days, those are three very different things. Realtor Magazine says that the low supply/quick sale/high selling price phenomenon is only getting more intense these days. “Eighty two percent of homeowners who sold in the last six months accepted offers at list price or above, according to a new survey of about 1,600 homeowners conducted by Homes.com,” they reported.
Sales are lightning fast as well, with 25% of sellers saying they had five or fewer showings before finding a buyer, 26% had between 6 and 10 showings before selling. And nearly 10% say they had no in-person showings at all and were still able to sell their home using the increasingly useful and popular virtual tour option fueled by the pandemic.
The National Association of Realtors reports a whopping 88% of the homes sold in April were on the market for less than a month, while Homes.com says 27% of sellers surveyed saying they accepted offers $10,000 or even $20,000 higher than their requested sales price, according to their seller survey.
Sellers are becoming increasingly demanding as well, expecting more than offers over the asking price. Many surveyed say they refused consideration of contingencies or other strings-attached offers. They look for all-cash payments, no contingencies, and 30 days or less to close. Fourteen percent said they opted to sell their home “as is.”
Source: RealtorMag, TBWS
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
Rates are trending higher this morning. Last week the MBS market remained unchanged. This caused rates to move sideways for the week. Even though rates ended unchanged, we did see some volatility through the week.
This Week's Rate Forecast: Higher
Three Things: These are the three areas with the greatest ability to move rates this week. 1) The Fed, 2) Domestic, and 3) Geopolitical.
1) The Fed: The Federal Reserve Open Market Committee (FOMC) will begin two days of meetings on Tuesday that will culminate with their Interest Rate Decision and Policy Statement on Wednesday at 2:00 pm ET. While there is no chance of a change in their Fed Funds Rate, the market is very much on edge to see if the policy language shifts to a more "hawkish" tone which may include discussion about a "taper" (reducing the amount of their monthly Treasury and MBS purchases) or a "twist" (keeping the same level of purchases but shifting those dollars to shorter-term or longer-term instruments). This remains a lower probability, though, as the Fed has been quite clear that they are not near the point of adjusting their QE program. The market is focused on if at least the discussion is beginning (publicly) around tapering. Also, this is one of the meetings where we get their Economic Projections (the famous "dot plot chart"). Bonds will be very reactive to changes in the "groupings" of dots for inflation and rates.
2) Domestic Flavor: We get some key data on Tuesday, including Retail Sales and PPI.
3) Geopolitical: Congress is back in full session this week, and markets are keen on if an infrastructure deal can make it out of the House or Senate.
This Week's Potential Volatility: High
Rate markets have a lot to digest this week. The Fed on Wednesday is the most significant event this week that can move rates. As denoted above, rate markets will pay close attention to the language in the policy statement. On Tuesday, the Producer Prices could increase volatility, but rate markets will likely remain on hold until Wednesdays.
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 27 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.