Real Estate Market Review For Week Ending 10/12/18

MIXED FEELINGS

Fannie Mae's latest Home Purchase Sentiment Index shows mixed feelings among U.S. consumers. Fannie Mae's Chief Economist Doug Duncan explained the contributing factors in the latest report, saying "Perceptions of high home prices and expectations for rising mortgage rates continue to weigh on potential homebuyers. In September, the average 30-year fixed mortgage rate increased to its highest level since May 2011. Still, downside risk to housing is limited by broader economic strength. For consumers who say now is a good time to buy, the share citing overall economic conditions as a reason rose to a survey high."

RATES STEADY

Mortgage interest rates eased 1 basis point in the week ending October 4 according to Freddie Mac's Primary Mortgage Market Survey after hitting a 7-year high the week prior. This slight pause is expected to be temporary due to increasing strength in the fixed income and equities markets.

UNFAIR WEATHER

Mortgage delinquencies are at a 12-year low according to the latest CoreLogic Loan Performance Insights report, but catastrophic events have and are expected to continue to influence this housing market health indicator. CoreLogic President and CEO Frank Martell said, "We expect higher delinquency rates in the mid-Atlantic region due to Hurricane Florence. We also see increases in serious delinquency rates in Florida and Texas…Hawaii will likely experience an increase in delinquency rates as a result of Hurricane Lane and the eruption of Kilauea."

GOOD GRIND

While September employment growth of 134,000 new jobs was slightly disappointing and probably due to Hurricane Florence, the report was otherwise excellent. Upward revisions to July and August totaling 87,000 were spectacular, and the unemployment rate hit 3.7%, lowest level since 1969. Y-o-Y wage growth for the bottom 10% of workers rose 5.1%, topping average hourly earnings growth of 2.8%.