Gold futures surged above $2,550 and silver futures broke back above $30 again, but look at this…
August 29 (King World News) – Peter Boockvar: Not yet really capturing the timeframe where mortgage rates fell the most (that happened in August), July pending home sales were soft, falling by 5.5% m/o/m vs the estimate of up .2%. This follows a 4.8% rise in June and they are down 4.6% y/o/y.
The NAR said “A sales recovery did not occur in midsummer. The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming US presidential election.” I’ll fade the latter excuse as while one side has offered $25k to a prospective home buyer if elected, it has almost zero chance of being passed and even if it did, the price of the home will likely go up by $25k and completely offset it.
The real challenge remains price and supply, as we know, and I think we should wait to see the September/October housing data to really glean the impact of the recent move lower in mortgage rates. As for potential supply, a 6% mortgage rate may not bring that much more as around 80% of mortgage holders have a rate less than 5% but we’ll take all the supply that can be provided.
Bottom line, this index goes back to 2001 and the July read was the lowest seen. As stated though, let’s wait a few months to see to what extent the move lower in mortgage rates, if sustained, triggers more activity as it hasn’t happened yet as seen with weekly mortgage applications. And if all the lower mortgage rates do is bring more demand without a corresponding pick up in supply, ever higher home prices would just offset the benefit of lower rates.
© 2024 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.
