Mortgage interest rates ticked a bit higher in February, but remain below their February 2020 levels.
A robust increase in housing starts in December points to an active year for new construction, but higher material costs, especially lumber, and a limited supply of buildable lots will temper the number of new units.
December is normally one of the slowest months of the year, but strong buyer demand across most segments of the market, buoyed by near record-low interest rates, continues to drive a healthy sales pace in the face of a new wave of COVID-19 infections and a softening job market.
Showing activity remains higher than the same period a year ago across most of the country, suggesting that strong buyer demand is likely to continue into what is typically the slowest time of year.
Strong buyer activity has continued into the fall, which is normally the start of the seasonal slowing of the housing market.
In August, showings and pending sales remained at strong levels while housing inventory remained limited, continuing the competitive bidding market we have seen in recent months.
With the inventory of homes for sale still constrained, a competitive market for buyers shows little sign of waning.
Even as hopes of a phased June reopening all but faded, real estate activity continued to strengthen.
July 23, 2020
While housing demand continues to rebound, the month-long swoon in economic activity has caused the 10-year Treasury benchmark to drop. In the short-term, this means the demand will continue on the back of near record low mortgage rates. However, the most recent consumer spending data has been pointing to slow growth since mid-June. The concern is that the pause in economic activity will cause unemployment to remain elevated which will lead to longer-term labor market distress.
Information provided by Freddie Mac.