You and everyone else is in the market for a house… and it shows. It’s never been harder to buy a home with the number of offers each home gets and the ridiculous fact that 25% of those offers are cold hard cash.
What’s going on?
In the past, when selling your house consisted of more than just listing it, people would wait to see if someone would buy their current house before they started shopping for a new one. In today’s frenzy, people know they can sell their house, so they wait until they get a house under contract to list it. This is driving down inventory even further and tightening the timelines of the purchase process which makes cash offers that much more competitive.
To add to the number of reasons winning a home is hard, we now have to worry about affordability. The median home price across the country is up 24% from last year due to limited supply and home appreciation is up 13%. For buyers on a budget, this means that that house you qualified for last month may be out of the question this month (assuming you can get the contract nailed down to begin with).
The Bottom Line:
We know that the underlying factor of this crazy housing market is the easy money policies that have been put in place by the Fed. Between stimulus and the MBS spending that led to the lowest mortgage rates ever, the housing market is starting to look a little concerning, even to people who put those policies in place. Today, Boston’s Fed President voiced his concerns on the unsustainable hosing market rocket that we are currently on and hinted that even the 2023 planned stimulus taper may be too late.
The MBS market took a nice 22 bps jump this morning and are heading towards a ceiling. We recommend locking in the gains we have seen over the past week and not risk bouncing lower off the ceiling.