New home lot supply drops to cycle lows
The Federal Reserve raised short-term rates for the eighth time since 2015 earlier this week. The increase is part of the normalization process for rates and is occurring because the economy is doing well; one of the Fed’s roles is to make sure the economy does not overheat. In the housing market, while a 25-basis point jump in the federal funds rate does not equate to a like-for-like change in mortgage rates, the news comes at a time where there has been some resistance from buyers about current home prices. The latest move by the Fed brings rates back to top-of-mind for consumers after being relatively flat from the end of June to the middle of September, and, in some cases, will help buyers get off the fence.
– Ali Wolf, Director, Economic Research at Meyers Research
Forget the headlines, there are still pockets of strength in the housing market.
The broadest measure of national home sales, representing 90% of the overall market, shows slower activity on the year.
The rise in mortgage rates corresponds with higher 10-year Treasury yields.
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