The price of any item is determined by the supply of that item, as well as the market demand. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.
Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).
The map below was created after asking the question: “How would you rate buyer traffic in your area?”
By James Brooks
The bond market is down 1/32 (2.29%), which should Raleigh area mortgage rates unchanged.
Today is the only day of the week that does not have something scheduled for release that has the potential to affect mortgage rates. The rest of the week brings us five pieces of economic data that are worth watching, including two highly important reports.
June's Personal Income and Outlays data will start this week?s activities at 8:30 AM ET tomorrow morning. This report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for an increase of 0.3% in income and a 0.1% rise in spending. A larger than expected increase in income means consumers have more money to spend, which is not favorable to bonds because consumer spending makes up over two-thirds of the U.S. economy. Ideally, we would like to see declines in spending and...
By James Brooks
The bond market is currently up 6/32 (2.29%), which should improve Raleigh area mortgage rates slightly.
The first of this morning?s three economic releases was the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. The GDP is the total sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. It showed that the economy grew at a 2.6% annual rate during the April through June months. This was a jump from the first quarter?s revised 1.2% rate, but analysts were expecting to see a 2.8% rate of growth. This means that while the economy was stronger than it was during the 1st quarter, it still fell short of expectations. Also, a secondary reading that tracks inflation during the quarter came in much softer than forecasts (up 1.0% vs 1.8%). These readings were good news for bonds and mortgage rates and helped to erase pre-market losses from overnight trading.
According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
Bankrate asked Americans to answer the following question:
“What is the best way to invest money you wouldn’t need for 10 years or more?”
Real Estate came in as the top choice with 28% of all respondents (3% higher than last year), while cash investments – such as savings accounts and CD’s – came in second with 23% (the same as last year). The chart below shows the full results:
By James Brooks
The bond market is currently down 6/32 (2.31%), which should move Raleigh area rates slightly higher.
There were two pieces of economic data posted early this morning, one of which is considered to be pretty important to the markets. That was June's Durable Goods Orders at 8:30 AM. The Commerce Department announced a jump of 6.5% in new orders for big-ticket products such as airplanes, appliances and electronics. This was much larger than the 2.9% increase that was expected, making the headline number appear to be bad news for bonds and mortgage rates. While the spike in new orders is not favorable by any means, a secondary reading that excludes more costly and volatile airplane and transportation-related orders paints a different picture. The ex-transportation reading came in at up 0.2% when forecasts were calling for a 0.5% rise. In other words, the main headline number does not look good for mortgage pricing, but the more stable secondary reading does.
In today’s highly competitive seller’s market where there are more buyers than there are homes for them to buy, some sellers may feel like the ball is in their court.
And they would be right when it comes to choosing which offer to accept, the closing date, or even which improvements they are willing to make to their house prior to selling.
One thing to remember though, is that there is always a line that shouldn’t be crossed.
Interest rates can change, financing might not go through, the appraisal might not come back at the price that you have agreed to. These are all opportunities to work with your buyer to make sure that the sale still happens.
You may think that, because buyer demand is so high right now, you...
By James Brooks
The bond market is up 3/32 (2.31%), but due to weakness late yesterday in the bond market we should no change in Raleigh area mortgage rates .
June?s New Home Sales report was posted at 10:00 AM ET this morning. The Commerce Department announced that sales of newly constructed homes rose 0.8% last month. The percentage increase indicates stronger than expected sales since analysts were calling for no change from May?s level. However, the number of sales matched forecasts. A downward revision to May?s sales created the percentage increase, making the news neutral for bonds and mortgage rates.
We also have two afternoon events taking place today. The 5-year Treasury Note auction is first with results coming at 1:00 PM ET. These types of sales will not directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates....
Recently there has been a lot of talk about home prices and if they are accelerating too quickly. As we mentioned before, in some areas of the country, seller supply (homes for sale) cannot keep up with the number of buyers who are out looking for homes, which has caused prices to rise.
The great news about rising prices, however, is that according to CoreLogic’s Homeowner Equity Report, the average American household gained over $14,000 in equity over the course of the last year, largely due to home value increases.
The map below was created using the same report from CoreLogic and shows the average equity gain per mortgaged home during the 1st quarter of 2017 (the latest...
By James Brooks
The bond market is currently down 11/32 (2.31%), which should push Raleigh area mortgage rates higher by approximately .250 of a discount point.
The Conference Board gave us today?s only relevant economic data with the release of their Consumer Confidence Index (CCI) for July. The 10:00 AM ET release revealed a reading of 121.1 that exceeded forecasts of 116.8 and June?s revised 117.3. Analysts were expecting to see a decline in confidence, not a sizable increase. This is bad news for bonds and mortgage rates because rising confidence means consumers are more apt to make large purchases that fuel economic growth.
Tomorrow we have several events to watch. They start at 10:00 AM ET when the Commerce Department posts June's New Home Sales report. This data tracks sales of newly constructed homes, but they make up a much smaller portion of the housing sector than existing home sales. That makes the data less important to the markets than yesterday?s Existing Home...