Rates experienced their biggest drop in more than two years before flattening at the start of the long weekend. This leads us to the current situation: the 30-year fixed rate mortgage is 4 basis points lower at 5.25% while the 15-year mortgage is 3 basis points lower at 4.72%.
In addition to new home sales (see last week’s email), pending home sales are also seeing a slow-down. April was the sixth straight month of declines, dropping 3.9% from March’s levels. Sellers, seeing signs of a cool down, have been rushing to the market. Accordingly, listings jumped an astounding 9% compared to the same time last year. While sellers may bemoan this weaning demand, a momentary cool down may actually be healthy for the real estate market, which had largely been trucking along despite price gains, inflation, and rate hikes. As things settle down, the chief economist of NAR predicts existing home sales will fall to 9% and home price appreciation to 5% by the end of 2022. This would go a long way towards making housing more affordable for prospective buyers.