Friday, August 16, 2024 / by Becky Trujillo
Mortgage Rates Drop Again - Homes are 10% Off
Record Share of Sellers Paying Buyers’ Fees
For Buyers:
On August 5th, everything went on sale in the housing industry. As discussed in last month’s edition, multiple factors are pointing towards improvements in mortgage rates this year. Well, it happened faster than many were expecting at the beginning of August as average mortgage rates dropped abruptly to 6.3% before settling at 6.5%, a significant improvement from last April’s average rate of 7.5%. The net result for buyers was a 10%-11% drop in the principal and interest payments regardless of loan amount. Loans between $300K-$400K saw calculated payments drop from $200-$270 per month, while those between $450K-$550K saw drops between $300-$370 per month.
The drop spurred an immediate 16% increase in refinance applications week over week, per the Mortgage Bankers Association, as homeowners who decided to buy and “date” their 7%-8% rat ...
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phoenix market update, market update, phoenix metro update, august market update
Monday, July 15, 2024 / by Becky Trujillo
Three More Cities in a Buyer’s Market - Incentives Continue to Rise
Rate Drops Equal Major Savings for Buyers
For Buyers:
The second half of 2024 is expected to be better than the first half for buyers in terms of mortgage rates. Last year from July to October rates rose from 7% to 8%, increasing payments by hundreds of dollars and knocking many buyers out of the market. This time around, housing analysts are not expecting more dramatic rate increases. Instead, multiple factors are pointing towards improvement.
All eyes are on the Federal Reserve Board to determine when they may drop the Federal Funds Rate this year, but the Fed’s eyes are on annual inflation rates and the labor market. June’s inflation report came down more than expected to 3.0% and the response from mortgage rates was immediate, dropping sharply to 6.82%. That’s a major improvement from the 7.51% recorded on April 30th, and a savings of $187 per month on a $400,000 loan ...
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phoenix market update, market update, phoenix metro update, market update july 2024
Monday, June 17, 2024 / by Becky Trujillo
Price Negotiations and Concessions are Hot and Heavy this June
Will Rates Decline this Summer
For Buyers:
It’s feeling a bit like the movie “Groundhog Day” in the Greater Phoenix housing market as we relive the same scenario over and over. The Federal Reserve met this month and once again opted not to reduce the Federal Funds Rate, keeping it steady now for 12 months in a row. On the same day, the Consumer Price Index was released showing the annual inflation rate declined to 3.3%. The combination resulted in conventional mortgage rates dropping from an average of 7.16% to 6.98% in one day. This was expected, however the Federal Reserve board announced they anticipate one rate cut this year, possibly in September. That could mean a mortgage rate drop in late summer, if we dare hope.
While the drop is positive for buyers, rates are still too high to expect a major boost in demand at this stage. Sluggish demand combined with supply that&rsq ...
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phoenix market update, market update
Tuesday, May 21, 2024 / by Becky Trujillo
Spring Season was a Snoozer. Will Summer be the New Spring?
Greater Phoenix is in a Balanced Market - What Sellers Need to Do
For Buyers:
“So we keep waiting, waiting on the world to change.” ~ John Mayer
Mortgage rates have remained stubbornly high in 2024, continuing to suppress demand. As a result, the spring buying season was a dud this year for sellers. For active buyers, higher mortgage rates have led to less competition, fewer properties with multiple offers, accommodating sellers, more homes to shop in good condition, and a relaxed buying process.
As supply gradually rises, new listings have lingered on the market 5 days longer than last year and weekly price reductions are up 63%. How long this condition will last is as predictable as mortgage rates, which have been volatile and unpredictable for 2 years. If they do in fact decline this year as expected, then buyer demand will return in kind. After peaking in April at 7.5%, average rates have ...
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phoenix market update, market update, phoenix metro update
Tuesday, April 16, 2024 / by Becky Trujillo
Why Homeownership is a Hedge Against Inflation
Sellers Compete on Condition as Builders Ramp Up New Permits
For Buyers:
Inflation is a hot topic today. Talk to any investor about hedging inflation and they may bring up strategies that include gold, commodities, rentals, or even cryptocurrency. For young adults, however, the first step towards hedging inflation is typically moving out of a rental and into homeownership. Let’s discuss why.
The Consumer Price Index (CPI) is arguably the most quoted inflation measure in mainstream media. Most readers assume the main driving forces of the CPI are food and energy. They make up 20% of the weight, so that’s a fair assumption. However, it’s shelter costs that are weighted the heaviest of all the categories at 36%, specifically the cost to rent. Nowhere in the CPI does the cost to purchase a home come into the equation because there is no rent to pay if it’s purchased with cash, or the cost i; ...
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phoenix market update, market update, phoenix metro update
