KEY MARKET INDICATORS as of July 02, 2019
A Moderate Housing Rebound
While the Federal Reserve left the short-term rate unchanged at its June meeting, the 30-year conventional mortgage rate has already reacted to the slowdown in the global economy and rising uncertainties, falling by a total of 120 basis points since last November. The impact on housing affordability for potential homebuyers is significant. For a 30-year fixed rate mortgage with a balance of $260,000, the monthly saving is around $180. Looking at it another way, instead of taking out a $260,000 mortgage at a 4.9% interest rate, a buyer can take out a $300,000 mortgage at 3.7% interest rate and have the same mortgage payment. Lower interest rates have already produced a moderate increase in demand in the housing market and helped to support the market amid slower economic growth and rising uncertainties. Home sales year to date have increased by 3% compared to the fourth quarter of 2018. Responding to rising home sales, homebuilders are beginning to build more. So far this year, single-family housing starts are up 4% from the fourth quarter.
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Disclaimer: Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinions of Genworth Mortgage Insurance and are subject to change without notice. Genworth Mortgage Insurance has no obligation to provide revised assessments and assumes no duty to update information in the event of changed circumstances. While we have gathered this information from sources believed to be reliable, Genworth Mortgage Insurance cannot guarantee the accuracy of the information provided. Certain data discussed in this report is publicly available only on a time delayed basis. Genworth Mortgage Insurance strives to analyze data as it becomes available, but makes no representation that all data is reviewed immediately upon release.