Step Inside The Market - Week 31, 2023

StepInside Weekly 8/3

Good Afternoon Everyone,

In this week’s recap, we will focus on the current trends within the residential real estate market, some updates on homeowner sentiment and a great guide for those of you working with first time homebuyers!

😔 Over the last week, the average contract interest rate for a 30 year fixed mortgage increased to 6.93% from 6.87%. Rates at this time last year were at 5.43%.

• As a result, Purchase & Refinance applications were down 3% week-over-week

• This is the third straight week that purchase applications have fallen and represents the lowest levels since June.

• Additionally, due to the downgrading of US Debt earlier this week, the bond market has rallied, specifically the 10-year treasury yield, which will likely result in even higher rates over the next week. Bond yields are likely to hit 20-year highs.

😰 Due to high rates and limited housing stock, 82% of American homeowners feel locked-in to their homes due to their low rate existing mortgages.

• Due to the ongoing effects of raising interest rates, rising home prices and limited for-sell housing stock, this new reality has created a “golden-handcuff” effect.

• With most homeowners having rates in the 3-4% range, many see no incentive to buy a new home or move.

• 🔮 Silver lining: While none of us have a crystal ball, If history is any guide to the future, we should see rates cool off in the next 6-18 months, but until then, we are unlikely to see any massive sentiment change here.

🌞 Even though the general market isn’t in great shape, it's never a bad time to seek out and educate first-time homebuyers. Here is a great article that can be shared to help those clients navigate the homebuying process!

Thank for reading! Comment your thoughts below. We would love to hear from you!