Inventory continues to climb. We’re collaborating with teams to help sell their listings using temporary buydowns and educating clients on the cost of waiting. Let me know if I can share our Envoy calculators.
| What You Need to Know |
Data Check: Applications: Applications up 3.9% this week, reversing a trend. Applications dropped 16% in June. (MBA) Inventory: 651K homes on the market. Down slightly for the week and up 38% from last year. Inventory continues to grow but slowing. (Altos) Price reductions: Up to 38% of active inventory. Flat from last week. (Altos) Rates: Rates dropped to 6.9%. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand. For Buyers: Any softening in home values should be seen as an advantage and not a trend. The lock-in effect, housing shortage, and fewer transactions make any price drops likely temporary. For Sellers: Act like a builder. As inventory climbs and many markets soften, it’s time to consider seller concessions to drive buyer traffic and get homes sold. For Investors: CoreLogic reports that while “attached” rents are dropping, their Single Family Rental Index shows 3% year-over-year growth. |
Last Week Was Quiet, This Week Is a Test
Last week was relatively flat for rates. There were some weak bond sales, but higher-than-expected jobless claims helped temper the rate increase. The bottom line is that our rally is stalled, and rates are hovering around 7%.
Politics will be the wild card for the next few months. There is an expectation that the Fed may drop rates in September, but we expect that to be priced in over the next month. This week, we will see the Fed’s favorite measure of inflation, Personal Consumption Expenditures. This will certainly help them make their September decision and will help the bond market test resistance. The big fireworks are reserved for the following week when the Fed meets.
“90% of homeowners have rates below 5%. This is the primary reason we believe the softening market presents a great opportunity for buyers. Prices are unlikely to drop significantly due to inventory constraints, and when rates drop, we expect competition to push home values up. Savvy buyers can act now while the market is in transition.”
