Waiting to Write an Offer Could Cost You:

___

Published Date 3/27/2017

Realtor Report

Waiting to Write an Offer Could Cost You:

Homebuyers across the country continue to struggle with a historic shortage of homes available to purchase which has led to rising prices, multiple offers and reduced time on the market.

Highly selective buyers (particularly first-time home buyers with unreasonable expectations) are seeing homes vanish while they weigh the options over several properties that they are interested in.

Nationally, the number of homes on the market dropped for the eighth consecutive quarter in Q1, falling 5.1% from Q1 of 2016. And the inventory shortage continues to be most dire for more affordable homes.

Starter-home inventory fell by 8.7% year over year, while trade-up home inventory fell by 7.9%. Meanwhile, the stock of premium homes fell just 1.7% year over year.

“Recovering home values have proven to be a double-edge sword,” said Ralph McLaughlin, Trulia’s chief economist. “While homeowners across the country are thrilled to regain equity in their homes, many have not been in a hurry to trade up. This has added to the inventory gridlock that ties up would-be starter-home inventory from ever coming on to the market, further constraining supply and decreasing affordability.”

That disproportionate drop in starter-home inventory is making homeownership less and less affordable for first-time buyers. Right now, a typical starter-home buyer would have to dedicate 38.3% of his or her monthly income to buy a home, Trulia found. That’s a 2.9% increase from last year.

The bottom line is that homebuyers need to have their mortgage ready and be able to put in an offer quickly. Chasing a home with more features or for a lower price may very well result in losing out in the market altogether.

Source: Yahoo.com

This Week's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Lower

Mortgage rates are trending lower this morning. Last week the MBS market improved by +41bps. This was enough to improve mortgage rates or fees. Mortgage rates experienced moderate to low volatility.

This Week's Rate Forecast: Lower

Three Things: Here are the Three Things that have the greatest ability to impact mortgage rates this week. 1) Taxes, 2) Fed and 3) PCE.

1) Taxes. Health Care reform was an epic fail. The concept of a Republican controlled White House, Senate and House rubber stamping legislation and pushing through needed changes is narrowing and has traders walking back their expectations of regulatory reform, tax reform and infrastructure spending. This week, we will get a lot of talk regarding Tax Reform...IF it appears that it is going to be the same as Health Care, then MBS will continue to see support. IF it appears that it will move through the House, then MBS will sell off.

2) Fed: We have another big week in terms of the number of speeches:

03/27 Charles Evans, Dennis Kaplan
03/29 Eric Rosengren and John Williams
03/30 Loretta Mester, Dennis Kaplan and William Dudley
03/31 Neel Kashkari and James Bullard

3) PCE: The most important domestic economic release this week won’t hit until Friday. The Personal Consumption Expenditures release is what the Fed looks at then they say they have a target rate of inflation of 2%. They look at the YOY (year-over-year) reading and not the monthly reading. Last time, the YOY reading was at 1.9%. This report will also contain important Personal Income and Spending data.

Treasury Auctions this week:

03/27 2 year note
03/28 5 year note
03/29 7 year note

This Week's Potential Volatility: Average

Mortgage rates are headed lower on the heals of the fall of the health care bill. Markets will shift focus to the administrations ability to implement meaningful tax reform. We expect periodic volatility as the markets determine if reform is possible.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

http://nmlsconsumeraccess.org/

NMLS # 75605