John's Finance Corner: Navigating the Current Housing Market
As a Mortgage Loan Originator, staying on top of market trends is essential to helping my clients make informed decisions. February brought some notable developments in the housing market that are worth discussing. Here’s a breakdown of what’s happening and how it could impact you.
Home Builder Sentiment Takes a Dip
The National Association of Home Builders (NAHB) reported a decline in their confidence index last month, dropping from 47 in January to 42 in February. To put this in perspective, an index reading below 50 reflects lower confidence in the market. This index measures buyer traffic, current sales data, and future sales expectations—three key areas that all saw decreases. One possible factor contributing to this dip? Concerns over potential tariffs that might increase the cost of essential materials like lumber and appliances.
Existing Home Sales: A Mixed Picture
January saw existing home sales decline by 4.9%. However, there’s reason for optimism: overall sales have shown year-over-year growth for four consecutive months, and inventory on the market has been ticking upward. According to Lawrence Yun, the chief economist at the National Association of Realtors (NAR), this trend could continue, with sales gaining strength and prices stabilizing as we move further into the year.
Mortgage Rates and Treasury Developments
Last week, we saw some positive movement in the 10-year Treasury, leading to a small decline in mortgage rates. The Federal Reserve’s announcement to end their regular runoff of treasuries by mid-year was the key driver here. By maintaining their balance sheets and reinvesting into treasuries, the Fed is signaling measures that could help further ease mortgage rates as the year progresses. This is certainly welcome news for buyers looking to secure lower rates.
Inflation Data Could Steer the Market
Looking ahead, this week holds the potential for market-moving data. The Personal Consumption Expenditures (PCE) report is set to be released on Friday. This is the Fed’s preferred measure of inflation, with the Core PCE number being their primary focus. While recent CPI (Consumer Price Index) and PPI (Producer Price Index) reports showed little improvement in inflation metrics, parts of those reports feed into the PCE calculation. A slight drop in the PCE figure could trigger a rally in treasuries, further lowering interest rates to close out the week.
Staying informed about these trends is key to navigating today’s housing market effectively. Whether you’re a buyer, seller, or simply watching the market, understanding these shifts helps you make confident, well-informed decisions. If you have questions about how these developments might impact your mortgage journey, I’m always here to help!
John Lamberg
MORTGAGE LOAN ORIGINATOR
NMLS 189233
