State of the Market: September 2021
Midway Through 2021, Here's Where the Mortgage Market Currently Stands.
HOUSTON, Sept. 14, 2021 /PRNewswire/ -- After the tumultuous rollercoaster of a year that was 2020, we all entered into the new year with hopeful anticipation of a return to normalcy, and perhaps even some blessed predictability. And with the COVID-19 vaccine becoming more readily available as well as the polarizing presidential election year behind us, we had very good reason to remain optimistic.
Sure enough, the early months of 2021 were marked by a decline in COVID-19 cases, a relaxation of coronavirus-related mandates, and an uptick in economic activity. As is typical, mortgage rates followed suit of these optimistic economic developments, creeping up to a year-to-date high of 3.18% in late May, early April.
But as we enter into the second half of the year, the days—and mortgage market—are once again becoming marked by uncertainty. And, once again, the catalyst for these uncertain times is the COVID-19 virus, this time as a result of the emergence of the highly-transmissible Delta variant.
Mortgage Interest Rates.
Perhaps the aspect of the mortgage industry most heavily impacted by ever-evolving societal and economic factors, mortgage interest rates have steadied at or below the 3.00% mark for the majority of the second quarter.
After peaking in April, rates for a 30-year fixed-rate mortgage have risen above the 3.00% marker only once in the past four months. In part, rates have been kept down by increased economic concern caused by the influx of COVID-19 cases in recent months.
Despite currently low rates and fears surrounding the pandemic, a rate hike by The Federal Reserve System (the Fed) is not out of the question. For one, the July jobs report revealed better than expected numbers, an indication that the economy is recovering after the lockdown-related recession of 2020.
For now, as rates remain at record lows, it continues to be a good time for current homeowners to refinance. And, should potential homebuyers be able to find an available home within their price range (more on that in the next section), they can still benefit from the very low rates for the duration of their mortgage term.
Home Prices and Inventory.
Defying all expectations, the housing market was hot throughout mid-to-late 2020. After the shock of the initial COVID-19 outbreak and subsequent lockdowns subsided, the housing market adapted surprisingly well. Professionals in the industry moved to digital methods to continue selling homes, rates plunged as the Fed pumped money into mortgage-backed-securities, and we all seemingly became loathsome of our own four walls. All of these factors combined to create a seller's market, where houses were in high demand and supply was low.
As of mid-year 2021, it has remained largely a seller's market. And although July showed an increase in supply, prices are predicted to remain high as demand continues to outpace the supply. In July, prices were up 17.8% year-over-year, but did indicate a slight decrease from the previous month of June. This decrease from June pricing is due in large part to the 2% increase in supply from one month to the next. Even this very slight housing supply increase is easing pressure on buyers and creating a less competitive market than buyers have faced over the past year. Sale growth, however, is primarily being seen in the higher-end markets, as inventory for starter-homes is still limited.
Read more: https://myamcap.com/state-of-the-market-august-2021/
Sources: FreddieMac PMMS® | National Mortgage News1 | National Mortgage News2 | Realtor1 | Realtor2 | Realtor3 | U.S. Department of Labor | U.S. Department of the Treasury
SOURCE AmCap Home Loans
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article