CHM Blog

Realtor Market Insider October 26, 2020

October 27th, 2020 10:18 AM 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

Fall offers a glimmer of hope that home sales will level off

These days, potential homebuyers don't BUY homes. They "win" them. Multiple offers being the rule and not the exception to it, buyers are up against a limited number of homes for sale.

According to the National Association of Realtors, buyers continue to quickly pounce on whatever is available, evidenced by the NAR reporting that existing-home sales in September were up 21% year over year. Home prices jumped 14.8% last month as well, averaging $311,800.

So how about later this fall? Realtor.com ®'s Weekly Housing Report reflecting the week ending Oct. 17 shows some relief may be in sight for buyers who have been struggling to find a home to buy. "The number of homes for sale appears to be leveling off, according to realtor.com®. However, researchers are quick to point out that it still very much remains a seller's market heading into November," says the report.

Danielle Hale, realtor.com ®'s chief economist, says, "During a time when the housing market usually slows down, we are once again reminded that 2020 is anything but typical. Going into the last half of October, the median U.S. home for sale is still priced near the year's peak and is selling almost two weeks faster than last year." She goes on to say that at the same time, the pace of change has steadied and in some cases, even slowed. "This could be a welcome relief for buyers who have navigated not only a pandemic but also a fiercely competitive 2020 home buying season characterized by double-digit price growth and record low inventory."

The report also shows that newly listed homes nationwide fell 6% during the week ending Oct. 17, a slight uptick from the previous week. While new listings remain "vastly improved" over earlier in the year, and for the fourth consecutive week they are above the pre-pandemic pace, a stabilizing new listings trend could tempt potential sellers (who often are also buyers) to list their home, according to Realtor. At the same time, homes all over the country are selling anywhere from 8 days to a whopping 43 days faster than a year ago.

Source: NAR | 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 to slightly lower this morning.  Last week the MBS market worsened by -29bps.  This was enough to move rates slightly higher last week. We saw elevated rate volatility at the end of the week.

This Week's Rate Forecast: Neutral

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

1) Central Bank: We hear from two major Central Banks and Canada. The Bank of Canada will give us their latest interest rate decision on Tuesday, but it's Thursday's interest rate decision by the Bank of Japan and the European Central Banks that will get the most attention of markets.

2) Domestic: We have a very big week for economic data. Thursday's GDP will take center stage as it's expected to move from a depression-era pace of -31.4 in the second QTR to climb back to zero by a 3rd QTR rise of +31.9. On Friday, we get the Fed's key measure of inflation with the YOY Core PCE reading. Those are the two biggest releases of the week, but we have many other second-tier releases all week long.

3) Coronavirus: While the National and International Covid cases spike to levels much higher than ever before...leading to renewed shutdowns in many states and nations, key negotiators on both sides of the Aisle say that stimulus talks "continue."

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

  • 10/27 2 year note
  • 10/28 5 year note
  • 10/29 7 year note

This Week's Potential Volatility: Average

There is a lot of economic data this week that can move rates. Look for rate volatility to continue this week as domestic economic news is released, and new information comes out regarding a potential stimulus deal.

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 October 27th, 2020 10:18 AM

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