Rich’s Rates Roundup… All the week’s news affecting mortgage rates!

Last week was a huge week for mortgage-backed securities and for the economy in general. The Federal Open Markets Committee (the FED) met last week and issued its policy guidance. They hemmed and hawed but essentially stated that with the current data available they see room for potentially several interest rate cuts within the coming months. At the same time, Fannie Mae changed their year-end interest rate projection. They increased the projected interest rates overall to just over 6% at the end of the year. We may have to wait just a bit longer until we get that relief.

This week, we are looking at a great collection of data. First, we received new home sales today. This measures signed contracts on new build homes. The number decreased by a .3% annualized rate, while inventory increased, and the median new home price decreased by 3.5% (source MBShighway.com).

The median price decrease does not necessarily mean that home prices are falling. A decrease in the median price means that more lower-priced (think starter/entry level) homes are selling than luxury homes or homes to move-up buyers. This makes perfect sense based on the low interest rate environment of 2020-2022. Current homeowners are going to squeeze every last bit of utility out of their homes before moving as they do not want to give up their mortgages. They will double kids up in rooms, use home equity for renovations, or whatever else they have to do to keep their low rate. People are more in love with their mortgages than their houses. Thus, more of the home buyers out there are purchasing investment property, or are buying their first home before rates fall and prices potentially skyrocket.

This week we also have consumer confidence, jobless claims, the GDP, and the purchase price index coming out. Also, remember that this Friday is Good Friday, so markets (and likely your title company) are closed… but this loan officer will be working.

Have a great week everyone!