Market Update 13/10: Mortgage Bonds Rebound After a Rough Day

Overview:

Stocks and mortgage bonds both rebounded higher today after a rough day yesterday.

Philly Fed Chairman and voting member Patrick Harker said today that he thinks the Fed should keep the Fed Funds rate at its current level and no further increases. We continue to see growth a group within the Fed believes the Fed should stop raising interest rates, which is a good thing.

Zillow Home Price Index

Zillow reported that home prices fell 0. 1% in September, but were still up 2. 1% over the same period times last year. Home values are still on track to increase 6% by 2023, according to Zillow. This time of year is usually the time when house price growth is weakest.

Article by Business Insider - Homebuyers finally see the light at the end of the tunnel, but it will cause difficulties for owners and sellers. In this article, Jeremy Grantham, co-founder and chief investment strategist of GMO, says he it would be a “good estimate” if the home value drops by 25 to 30%. He cited increases in stocks and price increase.

Looking at stocks, they are up every year around this time. But inventory remains level historic low. Discounts from list price occur in 6. 5% of listings, but this number is 3% during the hottest housing market, so it never goes to zero. Also, many of them can are people who advertise their homes for more than they are worth and have to turn back reality. This measure also means that 93.5% of homes sold at original price or above - and we note that 32% sold above asking price.

The average home sold for 99.4% of the final list price – only 2021 has been higher in recent years. This number is higher than in 2020 and 2022.

Next week

Tuesday: Retail sales, NAHB housing market index

Wednesday: Mortgage Applications, Permits and Housing Starts, Fed Beige Book

Thursday: Initial unemployment claims, existing home sales