The numbers continue to show that people, especially millennials, are interested in home ownership. Despite higher home prices and higher rates, loan applications are still strong for home purchase loans. While refinances are significantly off year over year due to higher rates, purchase applications are down only about 10%. That is a far cry from what some would have you believe on social media and the TV “experts”.
Home prices are up on average 14.8% from this time last year, which is down but that is still significantly higher than the 5% or so rate experts were predicting. Despite all the claims of a housing bubble and higher foreclosures, we are at a 40 year low in actual units foreclosed upon. None of this is surprising if you just look at the markets and see that available home inventories of supply is down 4% year over year and we haven’t even addressed rent increases and the lack of new housing units coming close to meeting demand.
The bond market has improved a bit over the last few days and with strong demand for the 20-year bonds, we might be seeing some stability forming in this range. I’m not saying we won’t see future higher rates, and I’m also not saying we are heading back to 3% either, I am just sharing with you that we have had some positive news in the bond market, something we haven’t seen in a while.
Lots more to see and do before we call ourselves “back to normal” for sure, but having some positive news is certainly welcome. Hopefully we continue to improve, or at the very least, stay in this range for a while because the volatility has been a real challenge to deal with.
Next month we have another Fed meeting, jobs report, and second quarter inflation data to deal with, so keep your eyes open and if you like it, lock it!
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