17 Aug Record Builder Confidence and Lower Rates
Sentiment numbers from the National Association of Home Builders came in this morning regarding building confidence at 78/100. This is over an 8% increase from last months sentiment report and the highest the index has been since 1998. A potential coolant to this hot building market is rising lumber prices. As many lumber yards were shut down for the first couple months of the pandemic due to social distancing and lack of demand, there is a large shortage causing prices to rise between 25-30%. We will see if this is enough to stop the demand for new homes.
A couple weeks ago, we talked about the increasing rate that people are moving out of large cities to more rural areas. Across the country, rural housing prices rose 11.3% in the four weeks leading up to Aug. 2 while urban housing prices rose 6.7%. Redfin economists claim that the pandemic has caused 13% of homebuyers to change the area that they were originally looking to buy in.
Mortgage bonds are up this morning and sitting right under their 25 day moving average. If bonds are able to break above that ceiling, we could see them run up toward their record high established a few weeks ago. The safe move is to lock. However, you can float carefully if you are able to monitor the market.