Monthly Mortgage Market Trends

February 2019

February Mortgage Trends Insight


Producing Branch Manager

2018 marked a turning point; ending a long standing trend of historically low interest rates, unsustainable lack of inventory and double digit appreciation.  When sellers finally joined us in the 2nd  half of 2018 to take advantage of the equity they gained... their timing was grossly watered-down by interest rates climbing to rates not seen since 2011. There was also increased talk of the impending recession and loss in the stock market, keeping buyers on the sidelines. So what about 2019.  It holds the secret to what will unfold for both the economy and the housing market.

Interest rates hit their peak in November 2018 and began what is now a 2 ½ month slide backwards. The Federal Reserve board served desert at the end of January with Powell’s comments of exercising “patience” as the case for raising rates has weakened. Couple this with the lowest unemployment rate since 1969, increasing minimum wage, and strong labor market; buyers entering the market now have a little more breathing room.   

January has proven to be what the doctor ordered. Inventory got a shot in the arm as active listings went up 5.45% from December and 52% year over year. Yep.. that’s a real number.. 52% year over year. This is after December’s 46.76% year over year gain. New listings was the lifeblood with an increase of 109.7% over December and 13.6% year over year.  Keeping up with the increase in under contracts of 33.97% over December and 7.24% year over year.  

We can only hope this continues as a lack of inventory at the lower price points is still creating a barrier to entry for the first time homebuyer. Key drivers of insufficient housing supply include expensive and lack of land, rising material and labor costs along with state and local regulations. We continue to have less than 1 month of inventory for homes under $400k and less than 2 months for homes priced between $400-500k.  

With inventory up.. what’s down is Sold Homes. This should not be a surprise but expected given the circumstances.  Let’s consider where we left off the year. Interest rates were at their peak when home shoppers were going out looking at homes. The government shutdown also held back anyone closing with a USDA loan or in a flood zone. The holiday’s also historically slows down casual home buyers who are focused on the end of year activities.  

Mortgage purchase applications kicked off the year strong, which is a direct indicator of pending sales. Although we did see the week over week applications go down at the end of January; as was to be expected given Martin Luther King’s Birthday holiday. There are high expectations for the spring buying season to start now that the Superbowl is behind us.
This is an exciting time to be in Real Estate. As we approach the marking of the longest expansion period in June of this year (120 months); I continue to lean into buyers and sellers sharing the stability and opportunity real estate provides in a changing economy. Expectations of softening house price, appreciation, increasing inventory and continued low mortgage rates should give everyone in the housing market an opportunity to cheer.

Well that wraps up another DMAR Market Trends Commentary. If you are working with buyers who need to get pre-qualified or pre-approved during this exciting market; then make sure to give us a call.  We’d love to go to work for you. Nicole Rueth of the Rueth Team, Fairway Mortgage.  

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Why The Rueth Team?

The Rueth Team is dedicated to our clients success. It is this driving mission that keeps our team constantly learning and pushing beyond our boundaries. We find the solutions other lenders simply can’t (or won’t). We make a commitment to each borrower, fulfilling it with hard work, constant communication and creative problem solving. When a referral partner gives our name, they are confident knowing they are giving their clients the best chance of a smooth, successful experience.

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