CHM Blog

Top Ten Metros that Homebuyers are moving to:

A new report from real estate brokerage Redfin indicates that, despite elevated mortgage rates homebuyers continue to leave expensive metro areas like New York and Seattle for more affordable housing options in cities like Miami and Pheonix. Miami, Phoenix, Las Vegas, Sacramento, and Tampa were some of the most popular destinations for homebuyers to relocate from pricey cities such as New York, Seattle, Los Angeles, and San Francisco in February.

Redfin noted homebuyers are leaving San Francisco, New York, and Los Angeles more than any other metro in February, followed by Washington, D.C., and Chicago.

While increasing mortgage rates have made home buying the most expensive in a generation, some folks relocating are unconcerned, as they are moving to areas with more affordable housing options.

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 getting a mild boost today. The MBS market worsened by -7 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last 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) Jobs, 2) The Fed and 3) Overseas News.

1) Jobs: We get a ton of job and wage related data this week that culminates in Big Jobs Friday. The overall strength of the labor market along with wage pressures (or lack thereof) can have a very large impact on backend pricing.

2) The Fed: The long bond market will continue to focus heavily on the Federal Reserve and their rate hike path and will continue to hedge based upon those expectations. This week we will hear from Bullard, Cook, Mester.

3) Overseas News: Concern over the European banking crisis, OPEC, and interest rate decisions from Australia and New Zealand will be in focus.

This Week's Potential Volatility: High

This morning markets are getting a small boost on chaotic foreign news. Volatility has started high and will likely spike throughout the week.

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.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 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.

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