March 16th, 2021 6:02 AM by Richard Sardella MLO.100007700/NMLS 233568
Housing market continues to break records
This past year has set a lot of records. After all, a pandemic and real estate can make for pretty strange bedfellows. National Mortgage Professionals' Navi Persaud reports that the median home-sale price increased by 17% year-over-year to $328,350 — an all-time high as cited by Redfin.
Redfin also reported that pending home sales were up 19% year-over-year and up 3% from the four-week period ending Feb. 7. "In the two weeks since, pending sales dipped during the winter storms over the 7-day period ending Feb. 21, the weekly number of pending sales is up 17%," says Persaud, who says asking prices for newly-listed homes also hit a new all-time high of $349,975, up 10% year-over-year.
It seems the pandemic saw rising statistics in a number of areas, including home prices. "Buyers have learned that if they aren't aggressive enough one week, they will have to bid higher on a home that's listed the following week," says Redfin chief economist Daryl Fairweather. "This super competitive housing market has been fueled by rock-bottom mortgage rates, so home prices should start to grow at a slower rate as mortgage rates tick up."
More than half (56%) of homes that went under contract had an accepted offer within the first two weeks on the market, above the 45% rate during the same period in 2020, according to Persaud. "This is another new all-time high for this measure since at least 2012 (as far back as Redfin's data for this measure goes). During the 7-day period ending March 7, 59% of homes sold in two weeks or less."
Source: NMP | Redfin | 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
Mortgage rates are trending mostly sideways this morning. Last week the MBS market worsened by -38 bps. This was enough to worsen mortgage rates or fees. We saw a good deal of rate volatility through most of the week.
This Week's Rate Forecast: Higher
Three Things: These are the three areas that have the greatest ability to move rates this week. 1) Central Bank, 2) Domestic and 3) Stimulus
1) Central Bank: We will get key interest rate decisions and policy statements from 3 of the world's top five central banks, including our Federal Reserve, Bank of Japan, and Bank of England. Of course, our Federal Reserve will be the driving force in rates this week. While it would be a shock to expectations if any central bank made any rate moves or material policy changes, the markets will be very sensitive to the Fed's change in their economic projections this week.
2) Domestic: The most significant domestic economic events this week are Retail Sales, Weekly Jobless Claims, and the 20-year bond Treasury auction.
3) Stimulus: Now that the Budget and $1.9T stimulus has passed, markets will continue to adjust to the forthcoming auto-deposits and potential consumer spending for extended unemployment benefits ($300 per week), stimulus check ($1400 per human living at your home), and $250 per month per child in advanced tax credits.
This Week's Potential Volatility: High
Once again this week, we're looking for a good deal of rate volatility. The Fed's economic projections on Wednesday could spark rate volatility depending on what they say. We'll also keep a close on this week's economic data, particularly retail sales on Tuesday.
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.