Make it three. Freddie Mac reported Thursday that the average 30-year fixed rate slipped to 7.18%, down from 7.24% the week before and 7.32% two weeks ago. It is the third straight weekly decline. The 15-year fixed eased to 6.57% from 6.60%. We still have a long way to go, since a year ago the 30-year averaged 6.22%, but the trend is finally working in buyers' favor.
What does that mean in dollars? On a $350,000 loan, principal and interest at 7.18% comes to about $2,371 a month. That is roughly $52 less than at the 7.40% peak in early October, or more than $600 a year back in your pocket.
Three Weeks of Relief, With a Caveat
Realtor.com senior economist Hannah Jones noted that any progress toward resolving the conflict in the Middle East could mean lower inflation and softer mortgage rates ahead. She also cautioned that stronger economic data can push bond yields up and slow the pace of rate declines, which is exactly the tug-of-war we are watching now.
The national housing market is still in a quiet stretch. Realtor.com's October report showed pending sales down 10.5% from a year ago, and 43% of active listings have had a price reduction. Sellers are not rushing to pull homes off the market, though, which suggests patience rather than distress. NAR releases October existing-home sales this Thursday, November 12.
Jobs Surprise, Oil Retreats
Friday's jobs report came in far stronger than expected. Employers added 165,000 jobs in October against forecasts of about 65,000, and August and September were revised up by a combined 84,000. The unemployment rate dipped to 4.1%. Wage growth of 3.1% over the past year still trails inflation, however, so many household budgets remain stretched.
Energy markets moved the other way. Brent crude fell about 12% last week to around $98.55 a barrel, with WTI near $91, as traders priced in hopes for peace talks involving Iran and the Russia-Ukraine conflict. Attacks in the Strait of Hormuz kept the drop from going further. Cheaper oil, if it holds, helps ease the inflation pressure that has kept rates high.
Consumers noticed. The University of Michigan's preliminary November sentiment index rose to 51.0 from 48.0, and year-ahead inflation expectations fell to 4.3% from 4.7%. The Federal Reserve held its benchmark rate at 3.75% to 4% at its October 28 meeting, with two officials preferring a hike, and its next decision comes in December.
A Buyer's Window in Central Utah
Statewide, Utah's market has tilted toward buyers. Utah's MLS showed about 18,443 active residential listings in mid-October, with the median listing on the market for 68 days. Prices have held roughly steady, with the statewide median near $530,000 in September according to Utah Realtors data, while sales have slowed.
In Central Utah real estate, that shows up as more choice and more room to talk. If you are home buying in Sevier County, Richfield, Salina, Manti, Ephraim, Nephi or Delta, the slower winter months often bring motivated sellers. Combined with falling mortgage rates, now is a smart time to ask about a rate buydown or seller-paid closing costs.
For home selling, a well-prepared, fairly priced listing still attracts serious buyers, and serious buyers are exactly who shows up in November. Sevier County homes that are priced right from day one avoid the price cuts that are now common nationwide.
Want to run the numbers on a purchase or see what your home could sell for this winter? Our team at Donavan & Tyson is here to help. Reach out anytime.
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