As the first quarter of 2023 drew to a close this week, borrowing costs are decreasing as home sales are rising. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.32% This Week in Real Estate. That is down 10 basis points from the prior week, marking the third consecutive week of declines. The National Association of Realtors released its monthly Pending Home Sales Index (PHSI) on Wednesday, reporting growth for the third month in a row. The Consumer Confidence Index, reported by The Conference Board, rose 0.8 points in March, following two months of declines. Below are a few newsworthy events from the fourth week of March that influence our business:
Mortgage Rates Fall For The Third Week in a Row. Homebuyers saw another week of falling mortgage rates, with the average rate dropping last week for the third week in a row, according to data from Freddie Mac released Thursday. The 30-year fixed-rate mortgage averaged 6.32% in the week ending March 30, down from 6.42% the week before. “Economic uncertainty continues to bring mortgage rates down,” said Sam Khater, Freddie Mac’s chief economist. “Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers.” Buyers continue to be very sensitive to mortgage rates and are expected to eye any more dips this spring as an opportunity. “The mortgage market has seen a partial revival in March, with the recent decline in mortgage rates boosting borrower demand,” said Bob Broeksmit CEO of the Mortgage Bankers Association. While applications for home purchases and refinances are still well below levels from a year ago, both have increased for four consecutive weeks, according to MBA. Read the full story here.
U.S. Pending Home Sales Rise For The Third Month in a Row. Contract signings on homes in the U.S. rose for the third month in a row, as home buyers adjust to high mortgage rates. U.S. pending home sales rose 0.8% in February, according to the monthly index released Wednesday by the National Association of Realtors. The figures beat Wall Street’s expectations. Economists polled by the Wall Street Journal were expecting pending home sales to fall by 3%. Economists view it as an indicator of the direction of existing-home sales in subsequent months. Recent housing data indicates that the sector is out of the woods and buyers are willing to accept the new normal of mortgage rates above 6%. But how sustained that recovery will be is the big question. Supply remains a key challenge in many markets. “After nearly a year, the housing sector’s contraction is coming to an end,” NAR Chief Economist Lawrence Yun said. “Existing-home sales, pending contracts, and new-home construction pending contracts, have turned the corner and climbed for the past three months,” he explained. Read the full story here.
Indexes Jump on Inflation Data; Nasdaq Posts Best Quarter Since 2020. Wall Street rallied more than 1% on Friday and the Nasdaq notched its biggest quarterly percentage gain since June 2020, as signs of cooling inflation bolstered hopes the Federal Reserve might soon end its aggressive interest rate hikes. The S&P 500 closed at its highest level since February 15 and posted a second straight quarter of gains. For the week and month, stocks also posted strong gains. The Nasdaq was up 6.7% for March. For the quarter, the Nasdaq jumped 16.8% in its biggest quarterly percentage increase since the three months ended June 2020. The S&P 500 gained 7% and the Dow rose 0.4% in the quarter, based on the latest available data. Read the full story here.
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