As a homebuyer, expect heated competition this summer

Just the Peaks

This newsletter, at a glance

  • Mortgage application volume is down 4.9%, mostly due to low inventory
  • Despite the moment’s fierce sellers’ market, a 30-year Fixed Rate Mortgage remains stable at 4.55%
  • With Everest at your side, you can scale any real estate mountain, in any market

Read on to learn why—and how to gain an edge

After a volatile first half of 2018, interest rates have finally stabilized. That may be music to your ears, but a cross-section of other factors is actually contributing to a particularly competitive buying climate. To add confusion, Mortgage Bankers Association reported a 4.9% decline in mortgage applications for the final week of June. So, what’s going on?

Rates are hot, but demand is scorching

Mortgage origination for entry-level buyers was soft not because of interest rates, but due to steadily rising home prices. With the exception of those in the luxury sector, sellers have been able to command top dollar, and the total of new listings simply isn’t enough to offset current demand. Comparing stats from May 2018, total offers fell 16.7% from the previous year.

Lackluster inventory aside, the numbers actually point to some positive signs for buyers across America. For eager buyers, the tapering of interest rates over the past few months actually offers a sense of consistency, translating into the confidence boost you need to take on today’s cutthroat sellers’ market. The financial relief (for the mortgage term) is also a huge plus.

Another noteworthy point is that despite the general drop in new-mortgage applications, we actually saw a 5.1% increase the previous week thanks to refinance volume.

 

                                                                                                                                                      

                                                                                                                                 Mortgage Rate Watch

                                                                                                                                 Week of June 28, 2018

Down from 4.57% the previous week15-year FRM
4.04%		 Unchanged from the previous week5/1-Year ARM
3.87%		 Up just .03 from the previous week

 

Battle of the Borrowers 

“The economy and housing market overall are on solid footing this summer, which should support continued strength in housing demand,” says Sam Khater, Chief Economist for Freddie Mac. “Home price growth is still high, but is expected to moderate, and while sales activity has slowed, it’s primarily because of stubbornly low supply.”  

Turns out, finances are flowing from the banks, and smart buyers can make a well-timed move. Just be sure to factor in all the trends this season when looking to the market to inform your home-buying/investment decisions.

Bottom line: Don’t be deterred by the headlines

In any market cycle, Everest‘s Heightened Level of Commitment
helps you enjoy a heightened level of buying confidence