Author: Eric BernsteinPublished:
Last week had some great news for homeOWNERS and some bad news for buyers. Despite interest rates starting to creep up since the start of 2024 - existing home prices continue to rise!
The good news for buyers is that rates were practically flat on the week. The average 30-year fixed rate conventional loan ended the week at 6.901%. Sign up for our weekly Friday rate texts to see all the great options LendFriend provides to homebuyers!
Home Prices Are Breaking Records!!
Everyone has a friend that can't wait to tell you that the housing market is going to crash, but once again, the data proves the naysayers wrong. It's still a great time to be a homeowner.
The median home price for existing homes increased more than 5% year over year, marking the seventh straight month of annual gains. The median price of $379,100 was the highest for the month of January on record.
Existing home sales also increased - up 3.1% from December to January, which is unusual since we typically notice a drop in sales from December to January.
The inventory of unsold existing homes increased just 2% from one month ago. Home sales outpacing inventory growth is NOT good for buyers hoping to score a deal.
As we noted last week, the inventory of homes for sales is so small right now that even with low demand due to 7% interest rates and record high home prices, there's enough demand out there for seller's to get the price they want (or at least very close to it).
Minutes from The Fed's January Meeting confirmed that they are being vary cautious about when we'll see rate cuts
Fed participants noted there's a huge risk of moving too quickly and emphasized the importance of assessing data to confirm inflation is moving down sustainably to 2%.
They also noted that they did NOT expect to reduce the target range for the federal funds rate until they had gained GREATER confidence that inflation was moving sustainably toward 2 % - basically if they weren't happy during the January meeting on inflation's progress, there's no way they are happy after the February CPI report.
The economy and labor markets are TOO hot and when you pair that with the inflation numbers - the Fed will be committed to keeping the Fed Funds Rate where it is for now.
If you a frequent reader of our newsletter - you'll remember that - as of Christmas 2023 - there was a 78.1% chance that the Fed was going to start cutting rates in March 2024, but since then we've seen a flurry impressive jobs numbers and data showing that inflation isn't falling as fast as expected.
The data in 2024 has caused the market to push the idea of any Fed rate cuts out until at least June, which means 30-year fixed rates may hover around here for a few months.
In other news...
Mortgage application demand has fallen as rates have risen. It's fairly typical to see appetite for mortgages to fall as rates increase, and last week was no different. Mortgage applications to purchase a home decreased by 10% from one week earlier on a seasonally adjusted basis, while refinance applications fell by 11% in the same period. Refinance applications are currently making up nearly 1/3 of all mortgage applications right now! Cash-out refis are very popular right now despite elevated interest rates.
US weekly jobless claims are still too low (201k actual vs 216k expected) despite layoffs continue. Layoffs still fail to make their way in the reporting and the labor market is still looking too good to cut rates.
The good news for buyers is that rates were practically flat on the week. The average 30-year fixed rate conventional loan ended the week at 6.901%. Sign up for our weekly Friday rate texts to see all the great options LendFriend provides to homebuyers!
Home Prices Are Breaking Records!!
Everyone has a friend that can't wait to tell you that the housing market is going to crash, but once again, the data proves the naysayers wrong. It's still a great time to be a homeowner.
The median home price for existing homes increased more than 5% year over year, marking the seventh straight month of annual gains. The median price of $379,100 was the highest for the month of January on record.
Existing home sales also increased - up 3.1% from December to January, which is unusual since we typically notice a drop in sales from December to January.
The inventory of unsold existing homes increased just 2% from one month ago. Home sales outpacing inventory growth is NOT good for buyers hoping to score a deal.
As we noted last week, the inventory of homes for sales is so small right now that even with low demand due to 7% interest rates and record high home prices, there's enough demand out there for seller's to get the price they want (or at least very close to it).
Minutes from The Fed's January Meeting confirmed that they are being vary cautious about when we'll see rate cuts
Fed participants noted there's a huge risk of moving too quickly and emphasized the importance of assessing data to confirm inflation is moving down sustainably to 2%.
They also noted that they did NOT expect to reduce the target range for the federal funds rate until they had gained GREATER confidence that inflation was moving sustainably toward 2 % - basically if they weren't happy during the January meeting on inflation's progress, there's no way they are happy after the February CPI report.
The economy and labor markets are TOO hot and when you pair that with the inflation numbers - the Fed will be committed to keeping the Fed Funds Rate where it is for now.
If you a frequent reader of our newsletter - you'll remember that - as of Christmas 2023 - there was a 78.1% chance that the Fed was going to start cutting rates in March 2024, but since then we've seen a flurry impressive jobs numbers and data showing that inflation isn't falling as fast as expected.
The data in 2024 has caused the market to push the idea of any Fed rate cuts out until at least June, which means 30-year fixed rates may hover around here for a few months.
In other news...
Mortgage application demand has fallen as rates have risen. It's fairly typical to see appetite for mortgages to fall as rates increase, and last week was no different. Mortgage applications to purchase a home decreased by 10% from one week earlier on a seasonally adjusted basis, while refinance applications fell by 11% in the same period. Refinance applications are currently making up nearly 1/3 of all mortgage applications right now! Cash-out refis are very popular right now despite elevated interest rates.
US weekly jobless claims are still too low (201k actual vs 216k expected) despite layoffs continue. Layoffs still fail to make their way in the reporting and the labor market is still looking too good to cut rates.
Key reporting dates this week:
Mon, 2/26: New home sales
Tues, 2/27: S&P Case-Shiller home price index (20 cities), Consumer confidence
Wed, 2/28: Q4 GDP (first revision)
Thurs, 2/29: Initial Jobless Claims, PCE, Core PCE, Pending Home Sales
Fri, 3/1: Construction spending, Fed members speaking
.png?width=1200&height=244&name=Homebuyer%20Tools%20Header%20(10).png)
About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.