By the end of first week in August we saw a drop in mortgage rates to below 5% for the first time since April! According to said George Ratiu, Realtor.com’s manager of economic research, “without a clear direction, markets are confining mortgage rates to move within a tighter range, as the sharp upward push has moderated,” he said. This statement goes in line with Dr. Yun's last insight, that the large jumps and spikes in rates have already happened, making for a more stable market rate.
Another positive benchmark for the market was in the report of low unemployment rates for July. "Based on Friday’s BLS (Bureau of Labor Statistics) data, employers added 528,000 jobs in July—up from 372,000 in June. This mid-summer performance helped bring the national unemployment rate down to 3.5%, marking a total return to its February 2020 pre-pandemic levels" (RisMedia.com).
What does this low unemployment rate mean to the housing market? It goes hand-in-hand to say that a job, income, and applying for a mortgage are positively correlated. But overall, unemployment is showing a strengthening economy in a time when people fear a recession. It is one step forward in the right direction.
Dr. Lawrence Yun, Chief Economist at National Association of REALTORS says: "Given the comeback in jobs, how are home sales? They are running below the pre-pandemic numbers seen in early 2020 and slightly below the 2019 annual total. Mortgage rates appear to be settling down over the past month at below 6%, with the past week dipping to 4.99%, but they are well above the 3.6% to 3.9% rates in the months before the pandemic. In other words, home sales are more impacted by mortgage rate changes than jobs. But the recently stabilizing mortgage rates suggest home sales will also soon stabilize and are likely to make steady gains in 2023."
Steadying interest rates, an increase in home inventory, and as more and more Americans are going back to work, there is more opportunity for the housing marketing to become more stable. Whether you are looking to buy or sell, you can trust our experience and knowledge to guide and help you. CLICK HERE to contact us now!