Step Inside The Market - Week 19, 2023

StepInside Market Weekly 5/12

Happy Friday!

In this week’s recap, we will focus on the current trends within the residential real estate market and why ARM loans are becoming more attractive.

📉 The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.48% from 6.50%. With the FED signaling a pause in future rate hikes, we are likely to see a continued downward trend, however we shouldn’t expect large swings.

🕺Mortgage applications for purchase loans increased by 5%, while refinance applications were up by 10% this week! Again, this was mainly driven by the recent FED announcements.

❗ Even though we are seeing initial decreases in rates from the recent FED announcement, we have not seen housing prices decrease. This will likely remain true unless rates significantly drop, creating a more fluid housing market.

💭Are ARM loans back? Due to the low intro rates, ARM loans should be in the discussion with qualified clients, especially if they are looking for starter homes or do not plan on staying in the home for more than 10 years. With rates ~1% lower than fixed rate loans, clients can hedge the current high rates in hopes of lower rates in the future!

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