Market Spotlight
Week of October 28, 2024
What You Need to Know

Market Data 10/28/24
Applications ↓ -5.1 131 Three weeks of decline in the number of purchase applications. MBA

Inventory ↓ -0.1% 738,000 32% higher than last year, but potentially starting our seasonal decline. Altos

Price Reductions ↓
-1.5% 39.5% Back under 40% as a result of the small rate drop. Likely climbing again through the winter. Altos

Rates ↑ 0.2% 6.9% Rates up 0.2% from last week. No data driving the market as we wait for the Fed, election, and jobs report. MND

Markets Continue to Diverge. Local Data Wins.
For Buyers:
Inventory is likely to start dropping. In the short run, there are is more risk of rates climbing than opportunities for it to drop. Buyers can still take advantage of this market.

For Seller:

We have had buyers pulling back for three weeks. Days on the market are creeping up in most markets (check your local data). Buyers can act like a builder to offer a temporary buydown to lower mortgage start rates.

For Investors:

According to John Burns Research and Consulting the current gap between buying a start home and the price to rent is 45%. Rates would have to drop back to 3.5% to bring affordability back into line. This points to a very robust long term rental market. (see graphic)

Transition From Stability to Volatility
Interest rates have crept up over recent weeks, largely due to weaker bond sales. Rather than responding directly to current data, the market is positioning itself for anticipated shifts in the coming weeks. Upcoming economic data releases, combined with the intensity of election week, are set to amplify this dynamic.
This week marks the start of a potentially volatile period with the release of the Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, followed by Friday’s labor report. Labor market conditions remain a critical driver of today’s market outlook.
While rates are still lower than last year, the likelihood of rising rates outweighs any near-term expectation of a decline.

Special thanks for Jeff Tanaka at Envoy mortgage for this market update.
Jeff Tanaka
Envoy Mortgage
Sales Manager, NMLS # 316160
P: 805-927-3863
C: 805-459-5209
https://www.envoymortgage.com/jtanaka
jtanaka@envoymortgage.com
746 Main Street
Cambria, CA 93428