RATES DOWN AND UP AT THE SAME TIME?
The Federal Reserve cut rates, but mortgage rates went up because the bond market reacts faster than the Fed. The bond market had already expected several rate cuts, pushing yields and mortgage rates lower beforehand.
When strong economic data, like better-than-expected housing starts, came out, bond yields went up again, which pushed mortgage rates higher. For mortgage rates to drop, we need weaker economic data, better mortgage spreads, and more supportive actions from the Fed. – Read more here
WHAT DO REAL ESTATE AGENTS THINK?
Real estate agents aren’t too excited about the Fed’s larger-than-expected rate cut, as they believe it won’t significantly impact the housing market. Lower mortgage rates are already factored in, and any uptick in sales may push home prices higher, offsetting the benefit of the rate cut.
The market needs rates to drop to 5% or below to really make a difference. While lower rates could help in some areas, hot markets like Boston might see even higher prices, worsening affordability issues. – Read more here
AUGUST SALES KERPLUNK
Sales of existing homes dropped 2.5% in August compared to July, marking three straight months below the 4 million annualized sales mark. Despite slightly lower mortgage rates and increasing inventory, tight supply is keeping home prices high, with the median price hitting $416,700, a record for August.
Homes priced over $750,000 saw more sales, while lower-priced homes under $500,000 saw fewer. First-time buyers only made up 26% of sales, matching a record low, as all-cash deals remain historically high. – Read more here
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