Existing home sales came in at a whopping 6,850,000, beating estimates with the highest print since 2006. Days on market fell from 36 days to 21 days on a year-over-year basis. Cash buyers remain at
Mortgage Rates Retreat But Housing Market Supply Crunch Wont Let Up
Dated: October 18 2018
Rates for home loans fell in tandem with the bond market, a welcome respite for the housing market after a recent run-up in home financing costs.
The 30-year fixed-rate mortgage averaged 4.85% in the October 18 week, down 5 basis points, mortgage buyer Freddie Mac said Thursday.
The 15-year fixed-rate mortgage averaged 4.26%, down from 4.29%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.10%, up 3 basis points.
Those rates don’t include fees associated with obtaining mortgage loans.
Mortgage rates follow the path of the 10-year U.S. Treasury note, but with a lag. That means that Freddie’s “weekly” survey, though dated and released Thursday morning, tends to capture mortgage and bond market activity from earlier in the week.
After zooming to a seven-year high earlier in October, bond yields have settled lower. Investors sold bonds after statements from the Federal Reserve signalled the central bank was likely to keep raising interest rates, and as a fresh supply of government debt has flooded onto the market to pay for surging deficit spending. Both trends would diminish the value of bonds that have already been issued, and bond yields rise as prices fall.
Meanwhile, the housing market continues to struggle.
The pace of newly-started housing projects sank in September, the Commerce Department said Wednesday. New-home construction is 6.4% higher for the year to date than in the same period last year, but it looks to be losing momentum at a moment when fresh supply is desperately needed.
“The economy and consumer sentiment remain very robust and that will sustain purchase demand, particularly in affordable markets and neighborhoods,” Freddie Chief Economist Sam Khater said Thursday. But for many buyers, home affordability isn’t the issue — availability is. When there aren’t enough homes to buy, prices go up and buyers drop out.
On Friday, the National Association of Realtors will report on September sales of previously-owned homes. Some analysts believe that September may bring rosier housing data than in prior months, but most are pessimistic about the bigger picture for the housing market.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....
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