March 22nd, 2021 11:06 AM by Richard Sardella MLO.100007700/NMLS 233568
Home remodeling becomes larger in scope during pandemic
At first, it was converting a bedroom into a home office, perhaps improving the "backdrop" for Zoom calls within a given room. Or perhaps a quarantined family set up a "home schooling" station in a den for their kids. While home remodeling has surged since the pandemic began, many of the projects initially were smaller in scope, according to Realtor Magazine, who says that now homeowners are going bigger with their renovation plans, beyond the DIY projects that dominated during the early stages of the COVID-19 outbreak.
This includes expanding and rearranging entire floor plans to suit their needs and functionality, according to the Q4 2020 Kitchen & Bath Market Index, released by the National Kitchen & Bath Association and John Burns Real Estate Consulting, who adds, "The NKBA projects a 10.7% sales growth for the remodeling industry in 2021.The rising desire for large-scale projects is prompting homeowners to move away from DIY jobs and hiring professionals to do more robust renovations." Anyone trying to hire a contractor right now will find out soon enough, as they are all nearly several months out from accepting new work.
"We're seeing an incomparable surge in homeowners looking to rearrange floor plans, tear out complete kitchens, baths, and other rooms to make space for increased activity within the home, and generally create a space that better suits their evolving needs," says Bill Darcy, the NKBA's CEO. "Our industry's greatest challenge will be operational, as our members aim to meet growing demand from homeowners with an unmatched appetite for remodeling."
The rising cost of materials and supply-chain disruptions don't helzwith the high demand for everything from cabinetry to appliances and skilled labor is hard to find, as more than 56% of remodeling contractors surveyed by the NKBA say that COVID-19 has worsened the already tight labor shortage due to the uptick in consumer demand. This results in longer to wait times for professionals to take on their remodeling projects.
Source: Realtor.com | 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: Neutral
Mortgage rates are trending mostly sideways this morning. Last week the MBS market worsened by -80 bps. This was enough to worsen mortgage rates or fees. We saw elevated volatility through 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) The Fed, 2) Domestic, and 3) Treasury Dump
1) The Fed: We will hear from Fed Chair Powell three times this week as well as Treasury Secretary Yellen and a bevy of other Fed officials. The bond markets will continue to focus on discussions around operation "twist" and when tapper might occur. Both scenarios were very much sidestepped in last week's Fed policy. Here is this week's schedule:
2) Domestic: The biggest economic release will be on Friday with the PCE data along with income and spending. But throughout the week, we have Durable Goods Orders, revised GDP, and Jobless Claims.
3) Treasury Dump: We have three shorter-term auctions this week, but one of those is the 7-year note. Last month, we had the worst 7yr note auction on record and sent MBS pricing spiraling lower as all interest-sensitive products took notice. Here is this week's schedule:
This Week's Potential Volatility: High
Rate markets are moving sideways so far today on mild volatility. However, this week has a lot of opportunities to see rate volatility spike. Rate markets will be paying close attention to what Powell has to say throughout the week, the domestic data, and the strength of the 7-year auction. Any one of those events can spike rates and volatility.
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.