Mortgage Interest Rates at Highest Point in 20+ Years!
A mixed bag of information today, yet it is still a consistent theme for the year.
Over the past 20 years that I’ve been selling homes, this is the highest mortgage rates that any of us have experienced. As you know from previous articles, the higher the rate, the lower a buyer’s purchasing power.
For now, we have seen a small percentage of price reductions in our low housing inventory. Look for that to change as buyers’ pocketbooks are being squeezed by the rates, homeowners’ insurance and general rising costs of everyday items.
What did the Fed say to push up rates yesterday?
The Fed Minutes said the usual: (1) they do not think we will have a recession; (2) they still think inflation is a serious concern; and (3) they think the labor markets are too strong.
In response to the Fed, many analysts said: Sigh…
Inverted yield curves, record credit card debt, lag effects of interest rate increases, China teetering on collapse, a clear trend of falling prices, and weak economic signals worldwide make a recession seem all but inevitable.
In addition, analysts like to remind the Fed that layoffs only start AFTER we are in a recession – so focusing on the labor market now is misleading. (This is from an article published by - Jay Voorhees NMLS 310167 Founder/Broker | JVM Lending). I like reading Jay’s posts and find his insights interesting.
Buyers still making offers
Even though the month of August has traditionally been a ‘slower’ month in real estate (meaning more housing inventory YTD and less home sales, homebuyers are still making offers. In my experience this month, offers are taking longer to come in (days on market) and at the asking price with a credit back, but for the right home, with that is priced right, these homes are getting the attention from consumers.
Traditionally higher in August, we have 88 detached homes for sale in all of Concord. This is the most that we have seen year to date. Walnut Creek now has 48 homes, Clayton has 18 homes and Pleasant Hill has 25 homes for sale. A little something for everyone.
Home sellers are staying put
The general theme is “why should I move?” I get it! When you have a very low mortgage interest rate and plenty of equity in many cases, there has been little reason to move. I feel like some owners are doing just fine and happy as can be in their homes. Good for them!
So, this is the overview for this week. It feels stable. Not crazy or depressing, just stable. And frankly that is a good thing with all that is going on in the world today.