WHIPLASH!

We had a very busy week. I have a new word I have been using to describe the mortgage rate market WHIPLASH! The beginning of the week saw a nice rally in mortgage back securities. We actually saw rates come down. That movement was due to the war in Ukraine. Then Wednesday and Thursday happened, Fed Chairman Powell appeared in front Congress. It was the biggest 1 day rise in the Mortgage-Backed Security(MBS)  I have ever seen! That caused rates to give back everything and MORE they gained Monday and Tuesday! Well, what did he say? Chairman Powell basically said to expect a .25 basis rise in March. The debt market wanted .50 basis points to fight inflation. And that the Fed would be accommodative to geo-political events, which has a hand in inflation. So, as I said last week, they really have backed themselves into a corner. Chairman Powell also said if need be, he would use some of the policies Chairman Volker had used in the late 70’s to curb inflation. OUCH! Double digit interest rates. WHIPLASH!!

Today we had jobs report and it was a good report with positive revisions. That gave us a small rally today in the MBS. WHIPLASH!!!

What does this mean for us in Real Estate?

 It is a good idea to check in with your buyers and their lenders to make sure they have not been impacted by higher rates. Especially Second/Vacation Home buyers. Inventories are still low, so prices are stable to moving upward. Cost of new construction continues to rise so new homes are more expensive to build. Communication and reverification should be essential to our buyer’s success.

If you have any questions or if you have a client that needs my help, please do not hesitate to call me