Buyers and Sellers Agree Now is a Good Time to Make an Offer
|According to the National Association of Realtors’ 2019 Q2 Homeownership Opportunities and Market Experience (HOME) Survey, 73% of people believe that now is a good time to sell a home, which is an increase over last quarter at 65% and 65% of people believe that now is a good time to buy a home, which is consistent with the previous quarter.|
This means that the vast majority of people continue to believe that we have a housing market on solid footing.
NAR Chief Economist Lawrence Yun said that ” Lower mortgage rates, along with job and wage growth, will lead to an increase in sales and thereby contribute positively to economic growth in the upcoming quarters,”
Source:NAR HOME report
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.00 MBS) gained +27 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move downward to their lowest levels of the year.|
Overview: Last week was all about the major Central Banks and the prospect for low inflation and lower cost of funds. We heard from 4 out of the top six world economies’ Central Banks and they all had a similar theme: They are all worried about stubbornly low inflation and the overhang of a prolonged trade war. This caused global long bonds to rally which in turn, caused mortgage rates to decrease.
The Talking Fed: The much awaited FOMC (in)action finally hit on Wednesday. You can read their official Policy Statement Here.
European Central Bank: Super Mario to the rescue. ECB President Mario Draghi did all but promise a wave of helicopters dropping cash into the masses today. He said that if the outlook doesn’t improve and inflation doesn’t strengthen, “additional stimulus will be required” adding that the ECB can amend its forward guidance, that rate cuts remain “part of our tools” and asset purchases are also an option. In short,a full dovish capitulation by the ECB chief.
Japan: The Bank of Japan kept their key interest rate unchanged at -0.1% (Vote 7 to 2). The BofJ said “Downside risks concerning overseas economies are likely to be significant, and it is also necessary to pay close attention to their impact on firms’ and households’ sentiment in Japan.”
Great Brittan: The Bank of England kept their key interest rate at 0.75% (Vote 9 to 0). The BofE said that UK economic growth has “weakened slightly in the first half of the year” and “downside risks to growth have increased.” and “Globally, trade tensions have intensified, domestically, the perceived likelihood of a no-deal Brexit has risen. Trade concerns have contributed to volatility in global equity prices and corporate bond spreads, as well as falls in industrial metals prices. Forward interest rates in major economies have fallen materially further.”
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.