Alpha

Discover

Real EstateFeb 7, 2023

The housing market sees signs of life as 30-year rates fall

Mortgage Dynamics

Victor Lei

Go Deeper

Related stories

mortgage rate

Most Homebuyers Overpay for Their Mortgage. Here's How to Beat the Odds

home-prices

Homeownership Is Entering a Costlier Era. The Financial Burden Is Growing Long After Buyers Get the Keys

housing shortage

America is 5M Homes Short and Policy is Finally Changing

existing-home-sales

Housing Market Rebounds: May Sales Beat Expectations, Affordability Improves

first time buyer

First-Time Homebuyers Are Overlooking Thousands in Down Payment Assistance

Tired of your annoying roommate? Looking for a heat check on the economy?

Best be paying attention to 30-year mortgage rates and housing data.

Why? The housing market makes up an outsized 15-18% of the US GDP. And a 1% difference in mortgage rates can mean Uber Eats or pick up an extra $137 monthly on a $300K mortgage.

Heat check: Since last November, US 30-year mortgage rates have fallen nearly one percentage point after breaking a 20-year high of 7%.

Far from the 3% seen a year ago, but we’ll take what we can get.

Buyers are easing back into the market — with many expecting that they can refinance later.

Mortgage applications have risen by nearly a quarter since the end of 2022.
Real estate brokerage Redfin (NASDAQ:RDFN) said they’re seeing more people contacting real estate agents.
D.R. Horton (NYSE:DHI) — the largest US homebuilder, reported increased sales activity at the start of 2023.

Where’s the market heading? Some thoughts from Goldman Sachs:

Housing’s negative impact on the economy has already peaked.
Prices are to decline 6%, and sales to bottom in the first six months of 2023 — and recover from there.

But don’t expect the housing market to recover to its previous levels. Rates are expected to stay high, and housing supply is still low from sellers holding back.