The housing market showed signs of cooling last week, with several key indicators reflecting a slowdown in activity.

1. Pending home sales declined 7.3% in September compared to August and 11.3% from a year ago, with drops observed in all four U.S. regions.
2. Housing starts fell 5.2% to an annual pace of 1.22 million homes, and building permits also saw a slight decrease.
3. Builder confidence reached a 14-year low in October, driven by high mortgage rates, labor shortages, and rising construction costs. Limited new supply may help support home prices in the near term.

Investor activity shifted toward U.S. Treasuries due to unrest in France and growing concerns about AI-related debt, which has helped stabilize mortgage rates.

The average 30-year fixed rate remained stable compared to the previous week, according to Optimal Blue. This index reflects about 35% of mortgage transactions nationwide and is not a rate quote. Your specific rate will depend on factors like credit score, loan-to-value ratio, and other considerations. I can provide current rates tailored to your situation.

Mortgage-backed securities (MBS) were flat during the update, with some positive movement on the chart, indicating that rates are likely to remain steady.

This week includes a busy economic calendar, with several key reports and Fed activity. The Fed is not expected to change rates at this meeting, but markets are pricing in a 73% chance of an increase in December.

1. On Tuesday, key data points include ADP Weekly, Durable Goods Orders, Case-Shiller and FHFA Home Price Indexes, New Home Sales, and Consumer Confidence.
2. Wednesday features the Fed Rate Announcement, as the FOMC meets on October 27–28.
3. Thursday includes Jobless Claims, Personal Consumption Expenditures (PCE), and Gross Domestic Product (GDP).
4. Friday covers the Employment Cost Index and Chicago PMI.

Join me this Thursday at noon for a one-hour Zoom session on the major changes coming with the new UAD 3.6 conforming appraisal format and how it will impact your work and clients. Mallory Lamb, Appraisal Manager at New American Funding, and Shaun Moore, Certified Residential Appraiser, will be joining the discussion. The changes take effect next week, and some lenders are already testing the new format.

For a real estate agent, this update highlights the importance of understanding appraisal changes and their impact on transactions. Reach out to me for the Zoom link or to RSVP.

This week, I worked with a potential client looking at a home just under $900,000 with a 30-year fixed conventional loan and 20% down. We compared a $50,000 price reduction with a $25,000 seller credit used to buy down the interest rate. The rate buydown lowered the monthly payment by a few hundred dollars more than the price reduction, keeping more cash in their pocket at closing.

The Mortgage Bankers Association and Fannie Mae both anticipate rates in the low-to-mid 7% range next year. While forecasts are not guarantees, it may be a long wait if you're hoping for a significant drop in rates.

A seller-paid rate buydown can be similar to having the seller pay for your future refinance, potentially saving more over time than a price reduction at today’s rates. It’s important to work with a lender who can run the numbers for your situation and provide a Total Cost Analysis.

Whether you're buying, refinancing, or exploring a retirement mortgage, I’d be happy to discuss your options. Reach out to me for a personalized conversation.