POST TAGSMarket Updates
Blog posted On October 17, 2023
Mortgage rates made good downward progress last week. This week is a different story. Yesterday, rates jumped back to higher levels for no specific reason from any economic reports. However, there might be hope on the horizon. Several Federal Open Market Committee (FOMC) members have been vocal about their belief in a rate hike pause.
Five to seven out of the twelve Fed members have vocalized the need for another rate hike pause. Though the Fed doesn’t directly set mortgage rates, its decisions can influence their trends. Inflation is consistently trending in the right direction, which is a good sign. The Fed’s main goal with rate hikes has been to combat high inflation. Another good sign for inflation is the cooling in rent prices. Shelter costs make up a huge portion of inflation.
While rent prices are cooling, the National Association of Realtors (NAR) recently released its August home affordability index that said affordability was at its worst place in 30 years. However, it’s important to consider the method of measurement for the index. To gather their information on home affordability, they use median income. By using median income, they’re including a lot of people who aren’t necessarily at the stage in life where they would be home buyers. This could include people who are 17, 18, 19 years old working at a restaurant to help pay their way through college. In other words, they are most likely not trying to buy a home.
Coming up this week we have a few big housing reports:
WEDS: Housing starts and building permits
THURS: Existing home sales
Let us know if you have any questions about the current market.