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Blog posted On February 22, 2024
Last week brought less than good news for mortgage rates with a hotter-than-expected inflation report. The consumer price index (CPI) is the most popular inflation report. Up until 2022, it wasn’t a particularly influential report in terms of mortgage rates. Since 2022, inflation has become one of the most important reports for rates, causing massive rate swings when numbers came in above or below expectations. In BETTER housing news, existing home sales from January were higher than expected, proving that the market is already heating up for spring.
Existing home sales reach 5-month high
Existing home sales – which account for roughly 90% of all home sales – increased 3.1% in January. The increase brought the total seasonally adjusted annual rate to 4 million, which is higher than the 3.96 million expected. The rise likely came from the correlating downward trend in mortgage rates from December to January.
"Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year," said Lawrence Yun, the National Association of Realtor’s chief economist.
Supply remains a challenge
With more buyers on the market, supply has become an even larger concern. At January’s current sales pace, it would take 3 months to exhaust the current inventory of existing home sales – healthy levels are between 4 and 7 months.
Prices remain high
Tight supply has pushed the median existing home price up 5.1% year-over-year to reach the highest on record for any January.
"Multiple offers are common on mid-priced homes, and many homes were still sold within a month," said Yun.
Still many ways to help buyers into homes
There’s still hope for buyers struggling with affordability – like a temporary buydown or down payment assistance options. If you’re curious, we can explore some options that might help.
Sources: Mortgage News Daily, Yahoo Finance
