The market and mortgage interest rates adjust as the Pandemic closes its one-year anniversary.
Last week, and for the first time in 9 months, the market witnessed an increase in the mortgage interest rates reaching over 3%, challenging the debt-to-income ratios and presenting the buyers with a new hurdle. So far, however, the change in rates has not affected the buyer’s resolve to secure their first home or their next home. With that said the refinance boom has slowed down in reaction to the rate increase; it will most probably encourage more sellers to sell their homes, which will, in turn, help resolve the listing shortage and bring some needed balance to the home sale market.
The increase in interest rates seems to be driven by consumer confidence as the number of vaccinated Americans is moving ahead of expectations and the economic indicators are showing positive signs. The Bureau of Economic Analysis upgraded its 4th Quarter GDP analysis in reaction to all the positive news. Unemployment claims declined to the lowest level since last March, Manufacturing is experiencing the biggest growth in two years!!
We have certainly made noticeable progress and things are looking up, but we still have a long recovery road ahead. We are optimistically cautious as the news from across the world are still showing countries in Europe and Latin America closing down and getting ready for a 3rd Pandemic wave.
I think that we are in for an interesting Summer. Businesses are praying for some normalcy and are gearing up for some kind of a pre-pandemic business and revenue, especially now that the new stimulus checks have been injected into the economy. We just have to wait and see.
Related Market reports
Sales of previously occupied U.S. homes slowed last month as rising prices and a dearth of homes for sale kept some would-be buyers on the sidelines.
The National Association of Realtors said Monday that existing homes sales in February fell 6.6% from January to a seasonally-adjusted rate of 6.22 million annualized units. Sales were up 9.1% from February last year, before the pandemic upended the economy and temporarily held up home sales last spring…(AP)