What Happened on Wall Street after Inflation: The Collider’s Eye Turns Wide of Wall Street and the S&P 500
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Markets plunged on Thursday morning after red-hot inflation data raised fears on Wall Street that the Federal Reserve would continue hiking interest rates aggressively. Something strange happened after that.
Stocks staged a massive comeback. The Dow Jones Industrial Average surged 1,500 points from peak to trough and the S&P 500 posted its widest trading range since March 2020, ending the day up more than 2%.
What’s happening: The consumer price index was up 0.4% in September, double the estimate from analysts. On an annual basis, inflation was up 8.2%.
“While this move was largely expected by investors, the Fed signaled to capital markets at yesterday’s meeting that it sees its aggressive monetary tightening having an effect on inflation,” said George Ratiu, Realtor.com’s manager of economic research.
So what explains the sharp divergence between markets and seemingly terrible inflation data? Investors could be betting that the stronger-than-expected inflation report means price increases are near their peak. The market shows how investors want to know what the Fed will do in the future.
The Big Picture of Global Assets: The Last Three Years and the Cost of Living in a World Without Walls and Walls: An Analysis from Allianz
The big picture is that household wealth is on track for its first significant reduction since the financial crisis of 2008.
Global assets are set to decline by more than 2% in 2022, Allianz reports. That means households, on average, will lose about a tenth of their wealth this year.
The report paints a bleak picture. The current outlook shows stagnant growth in the future, but the 2008 financial crisis marked by a relatively quick turn around. Over the last three years, the average annual growth of financial assets was 10.4%.
Russia’s war on Ukraine has obstructed the potential for a post-pandemic economic recovery, and increased food and energy scarcity. Inflation is rampant and central banks around the world are raising borrowing costs. Stock markets are likely to end the year in the red– 2021 “might have been the last year of the old ‘new normal’, with low interest rates and bullish stock markets,” wrote Allianz researchers.
Household debt, meanwhile, has been on the rise globally. “The context of rising interest rates and the higher cost of living could pose a risk to household balance sheets,” reported researchers.
The change in global wealth will take a while to recover from, as was pointed out by the insurer. Today’s release of US retail sales for September will likely shed more light on the state of the consumer, as will earnings reports from some of the country’s largest lenders — JPMorgan
(JPM), Citigroup
(C), Wells Fargo
(WFG) and Morgan Stanley
(MS) all report this morning.
Mortgage Rates Will Come Down Next Year, and Is There a Two Economy Story Behind Its Fading Inflationary Fed Rates?
But the upshot for homebuyers is that mortgage rates are expected to come down next year, Fratantoni said. MBA is forecasting mortgage rates to end 2023 at around 5.4%. Freddie Mac says that the average rate for a 30-year mortgage is 6.94%.
Mortgage rates rose throughout most of 2022, spurred by the Federal Reserve’s unprecedented campaign of harsh interest rate hikes to tame soaring inflation. But mortgage rates dropped in November and December, following data that showed inflation may have finally reached its peak, reports my colleague Anna Bahney.
“We continue to see a tale of two economies in the data,” said Sam Khater, Freddie Mac’s chief economist. Consumers are keeping their balance sheets positive while inflation and recession fears are driving down housing demand.
A homeowner buying a house that has an average rate of 6.92% would be paying $2,059 a month in principal and interest. It is $735 more each month.
There will be a great deal of competition in the market as buyers and sellers compete to buy and sell homes throughout the rest of the decade.
The new option will include a lot of what can be found in the Basic plan but will have an average of between 4 to 5 commercials per hour. The ads will be about 15 to 30 seconds in length and will be broadcasted before and during TV series and movies.
The Fall and Rise of the Mortgage Market in the U.S. After Two Years of Equity Loss: The Legacy of JPMorgan Chase, Citigroup, and Morgan Stanley
The company’s stock lost billions in market cap after that news. Hundreds of employees were laid off, and doubts ran rampant about the platform’s future, raising questions about the viability of the entire streaming marketplace.
JPMorgan Chase
(JPM), Wells Fargo
(WFM), Citigroup
(C) and Morgan Stanley
(MS) report third quarter earnings before the bell.
Mortgage rates ended 2022 holding fairly steady as markets reacted to the ongoing economic uncertainty, said George Ratiu, Realtor.com’s manager of economic research. On the other hand, he said, there is a growing expectation of a recession. The incoming economic data shows continued resilience.
The US economy is expected to have gained 200,000 jobs in October, down from 263,000 in September but well above the pre-pandemic average. The unemployment rate is expected to edge up slightly, to 3.6% from 3.5% — still close to a half-century low.
“The U.S. housing market is still supported by a tight labor market, the lock-in effect of low fixed mortgage rates for existing homeowners, tight mortgage underwriting, low leverage in the mortgage sector, and low housing supply,” said Brandywine fixed-income analyst Tracy Chen in a report this month.
The mortgage delinquency rate was a new record low in the second quarter of 2022, but it will increase in the coming years due to the increase in unemployment and the destruction caused by Hurricane Ian in Florida, Walsh said.
Expenditures continue to rise while origination volumes decline, according to Walsh. “Lenders have started to shrink excess capacity by reducing staffing levels, exiting less profitable channels or exiting the business entirely.”
Given the decrease in production volume from the record levels of 2020 and 2021, there will be a 25% to 30% decrease in mortgage industry employment from peak to trough.
Fed Rates Aren’t Going to Slow Down — The Signal of Inflationary Progress in a Time of Uncertainty
The Fed increased the interest rate by a quarter point, the smallest increase since March. The move to slow the pace of increases sends a clear signal that the central bank is seeing progress in its battle with inflation.
“Interest rates have risen at a whiplash-inducing speed, and we’re not done yet,” said Greg McBride, chief financial analyst at Bankrate. “Inflation will take some time to come down from the lofty levels, even once we do start to see some improvement.”
The Fed’s most aggressive monetary tightening in modern history — while driving up mortgage rates above 7% for the first time in 20 years, slowing business growth and crimping household spending — has barely made a dent in the labor market.
“We see today that there is a bit of a savings buffer still sitting for households, that may allow them to continue to spend in a way that keeps demand strong,” said Esther George, president of the Federal Reserve Bank of Kansas City. “That suggests we may have to keep at this for a while.”
George and her colleagues on the Fed’s rate-setting committee are determined to control inflation. But she’s also cautioned against raising rates too rapidly at a time of economic uncertainty.
“I have been in the camp of steadier and slower rate increases, to begin to see how those effects from a lag will unfold,” George said last month. “My concern being that a succession of very super-sized rate hikes might cause you to oversteer and not be able to see those turning points.”
“We are deeply concerned that your interest rate hikes risk slowing the economy to a crawl while failing to slow rising prices that continue to harm families,” Sen. Elizabeth Warren, D-Mass., and colleagues wrote in a letter Monday to Fed chairman Jerome Powell.
The Mortgage Rate Spread in the U.S. Compared to Wall Street Parlance and Mortgage-Background Bonds: An Overview from a Real Estate Perspective
Kansas City homebuilder Shawn Woods said his company has gone from selling a dozen houses a month before the Fed started raising rates to fewer than five.
Woods said he never thought the mortgage rate would go from 3% to 7% within six months.
Mortgage rates are influenced by the yield on 10-year US Treasury bonds. The 30-year fixed-rate mortgage is usually increased when the rate goes up. Mortgage rates go up when the Treasury rate goes down.
The base rate is typically tied to the yield — or rate of return — on a 10-year Treasury note, which is used because most people move to another home, prepay or refinance within a decade of getting a mortgage. A second rate is tied to the difference between the yield on those notes and mortgage-backed securities, or M.B.S., which are essentially interest-paying bonds backed by mortgages. The difference, known as the spread, is often referred to as Wall Street parlance.
Finally, there is an additional amount of interest charged that reflects the profits that lenders, servicers and other players make in the mortgage chain.
Many banks and other lenders don’t hold on to the mortgages they originate. They package them into bonds that they sell. The payments that homeowners make, including interest payments and prepayments, then flow through to those investors. And the money raised from selling the bonds — a vital source of financing for mortgage lenders — allows lenders to make more mortgage loans.
In normal times, the spread between Treasuries and mortgage-backed securities remains fairly consistent. Interest rates change as quickly as they do now.
The bond investors now expect to get paid more than the Treasury note they traded for widens the spread. So far this year, the spread has more than doubled, to 1.7 percent from 0.7 percent. The more the spread, the higher the cost to consumers for the increased rates.
The Real Issue of Mortgages and Homebuying in the 20th Century: How Boomers and Gen Z Meteorized the American Dream
A little over a decade ago, the dominant narrative about the housing market was that Millennials simply weren’t buying. They were either too cheap, lazy or nomadic to commit to something larger than a mortgage.
The stock surge was good for baby boomers with large investment portfolios who were willing to pass on some of the gains to their kids.
As that 2020 housing boom begins to go bust, those who managed to close on a home in the crush of competition fed by rock-bottom mortgage rates should count themselves extremely lucky.
For a historical comparison, the share of first-time buyers over the past decade has been between 30% and 40%. In the middle of the great recession, it was as high as 50%.
“They have to save while paying more for rent, as well as student debt, child care and other expenses,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. This year was faced with increasing home prices and rising mortgage rates.
Oh yeah, one other thing: In addition to mortgage rates going up, home prices also shot up, with the median peaking at $413,800 in June. Your starter home is likely to be 400 grand.
Housing is not good. I don’t purport to have a silver bullet, but it’s clear that inventory constraints and outdated zoning restrictions are a big part of the problem.
Rather than rebuilding within existing neighborhoods, housing supply has expanded through “sprawling single-family subdivisions at the urban fringe.” That’s putting more people and homes in environmentally vulnerable areas, such as wildfire-prone regions of the West.
The way we frame the American Dream needs to be reexamined as affordability reaches crisis levels. But that will only happen if those who stand to benefit — Millennials and Gen Z — are better represented in elected office. The upper-middle class Boomers in power are reluctant to change the system that got them where they are.
The Bank of England and Labor: Predictions for Inflation after a 5.75 Point Rate Higgs Rate Increase in 33 Years
Hot on the heels of the Fed’s fourth-straight 0.75 percentage point rate hike, the Bank of England followed suit Thursday, raising its own key interest rate by the same amount — its biggest hike in 33 years. The European Central Bank did that last week.
(Side note: “Basis points” are how central bankers talk about rate moves, which usually happen in tiny increments. The percentage point is one-tenth of a basis point.
Tomorrow, when the Bureau of Labor Statistics releases its October jobs report, it will be the last major read of the economy before the mid-term elections, and it will cap a week of new data signals that the labor market is showing only tentative signs of cooling off.
“This would still be a bit too hot, but any sizeable drop would provide Fed officials with a proof of concept for the idea that gradual labor market rebalancing can dampen wage and eventually price pressures without a recession,” they write.
Unfortunately for Democrats trying to hold on to power next week, the pain of inflation appears to be outweighing any positive sentiment about job security. According to a new CNN poll, three-quarters of likely voters already feel like the country is in a recession.
Editor’s Note: Erik Lundh is a principal economist at The Conference Board. The opinions are of his own. CNN has more opinion.
The Real Estate Market in the United States: Inflation after the Great Recession and the Recovery from the 2008 Housing Crisis Revisited
The country had a home surplus in the early 2000s, as a result of years of rampant demand. As a result, following the Great Recession, it took years for demand to work through the vast housing stock that had been amassed. This, in turn, crushed the homebuilding industry, causing chronic underbuilding over the subsequent years.
Additionally, in the years that followed the 2008 financial crisis, new regulations were introduced. Banks are required to be better capitalized; lending is more rigorous; and most mortgages are fixed-rate, which is better regulated. The financial system is still vulnerable to another housing downturn.
George Ratiu said that mortgage originators have lowered the cost of borrowing due to the easing of inflation.
Americans have more of a sense of financial security compared to the last financial crisis. The loan-to-value ratio, which is the amount of a mortgage relative to the value of a home, has dropped to its lowest point in 12 years. This makes it easier for prices to decline before home values fall below the loans that underpin them. Thus, if a home is sold at a loss, it’ll likely hit homeowners before it hits the banks.
The Bureau of Labor Statistics reported on Tuesday that consumer price index inflation fell to its lowest level in almost a year in November.
A Study of Mortgage Rates in the United States Using Loan Applications from Millions of Mortgage Loan Lenders and an Empirical Survey
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. The average rate will be higher for buyers with less-than-perfect credit and less money put down.
Ratiu said that this means that cooling in inflation measures will ease the upward pressure on mortgage rates.
“With more homes available for sale, and more of them sporting price cuts, some buyers are running the math and finding that the slide in rates is offering better options within their budgets,” said Ratiu.
Last week, mortgage applications increased as buyers took advantage of slightly lower rates, according to the Mortgage Bankers Association.
Last week the overall application activity declined despite the lower rates which is an indication of the still volatile time of the year for housing activity according to the vice president and deputy chief economist. The spring homebuying season will be supported by lower interest rates and moderate home-price growth. Both trends will help some buyers regain purchasing power.”
The number of homes for sale grew in January while prices fell, according to data provided by the real estate company, Real Estate.com.
Still, there are some promising signs that the worst could soon be over. Shares of the homebuilders rallied after reporting earnings last week. The company reported revenue that was much higher than analysts expected and its guidance for the number of homes delivered next year was a little higher than analysts estimated.
Kenneth Leon of CFRA Research said in a report that investors may be looking into the future and eyeing a possible recovery from the recession.
According to data from Amherst Group, an investment firm that buys single-family homes to rent out, it’s important to put the recent slide in prices in context.
It’s also worth noting that the job market is still strong and wages are growing. Many people have excess savings thanks to the governmentStimulus.
Some people point out that even though sales of homes may be weak, the good news is that most homeowners are paying their mortgage on time.
A lot of people with poor credit histories were able to make their mortgage payments, but that is vastly different from 2008 when a lot of people with subprime loans were unable to do so.
That isn’t bringing down the economy. The market has been affected. But mortgage delinquencies are still low,” said Gene Goldman, chief investment officer at Cetera Investment Management.
There aren’t a ton of companies reporting their latest earnings this week. But the few that are could give more clues about the financial health of consumers and the state of corporate spending.
On Tuesday, General Mills will release its earnings. Analysts are expecting a slight increase in both sales and profit. Consumers may be growing increasingly wary about inflation and the broader economy, but they’re still eating their Wheaties. Shares of General Mills
(GIS) have soared nearly 30% this year.
Analysts are less optimistic about the outlooks for sneaker king and Dow component Nike
(NKE), used car retailer CarMax
(KMX) and memory chip maker Micron
(MU), whose semiconductors are used in devices ranging from cell phones and computers to cars.
S&P 500 companies’ fourth-quarter earnings are expected to decline from a year ago. Analysts have been cutting their forecasts as well. The analyst at FactSet said that fourth quarter profits were expected to rise 3.7% as recently as September 30.
The chances of a recession are pretty high, according to an economist. It will have a negative effect on corporate earnings. Higher rates and weaker earnings suggest more pain for stocks.”
On Tuesday, there were: US housing starts and building permits; China set loan prime rate; and the Bank of Japan made a decision on interest rates.
The US economy is sinking in, and the Fed is putting it on its own: The gdp third-quarter-final
The Dow sank as America’s economy grew much faster than previously thought in the third quarter, a sign that the Federal Reserve’s battle to cool the economy to fight inflation is having only a limited impact.
The Commerce Department’s final reading Thursday morning showed gross domestic product, the broadest measure of the US economy, grew at an annual pace of 3.2% between July and September. That was above the 2.9% estimate from a month ago. Refinitiv had expected GDP to not change from its previous reading.
The report said the stronger-than-expected reading was due to increases in exports and consumer spending that were partly offset by a decrease in spending on new housing. Consumer spending is responsible for more than two-thirds of the nation’s economic activity.
US stocks tumbled Thursday on fears that the stronger-than-expected GDP could prompt the Fed to continue to raise rates more than expected in 2023. Stocks ended the day off their lowest levels but the Dow still lost nearly 350 points, or 1.1%, while the S&P 500 fell 1.5% and the Nasdaq was down 2.2%.
If the Fed doesn’t want to see anything that is better than expected, the data was better than expected.
“The reality of the Federal Reserve’s determination is sinking in,” said David Kotok, chairman and chief investment officer at Cumberland Advisors, referring to efforts to get the economy back on a path towards 2% inflation. “”I don’t see how a recession is avoidable unless the Federal Reserve changes its policy.”
Source: https://www.cnn.com/2022/12/22/economy/gdp-third-quarter-final/index.html
Consumer Confidence and Continuing Claims in the U.S. Consumer and Mortgage Markets: A Year-End Analysis with the Conference Board
“Part of the wide swings we are seeing is part of illiquidity into year-end as many traders and investors are on vacation and each new data gets overextrapolated in both directions,” noted Keith Lerner, chief market strategist at Truist Advisory Services.
A recent survey of chief financial officers found the current level of interest rates have not impacted their spending plans. The Conference Board said consumer confidence improved in December, reaching the highest level since April.
In addition, employers have continued to hire at a historically strong pace, although layoffs have increased in some industries, especially technology.
Initial weekly claims for unemployment insurance benefits ticked up to 216,000 for the week ended, December 17. The previous week’s total was changed to 214,000.
Continuing claims, which include people who are collecting benefits on an ongoing basis, dropped slightly to 1.672 million for the week ended December 10. The prior week’s number of continuing claims were revised up to 1.678 million.
“We just kind of got to that place in our lives where we were financially very stable, we wanted to start having kids and we wanted to just kind of settle down,” says Paul, 34.
The Fed has been hiking its interest rates. After a few months, with the mortgage rates going up, the Pauls were no longer able to afford the houses they were looking at.
“There’d be, you know, two dozen other offers and they’d all be $100,000 over asking,” says Paul. “Any any time we tried to wait until the weekend for an open house, it was gone before we could even look at it.”
Real Estate Sales Have Not Frozen in 10 Months, But They’re Beginning to Rejoin in 2023, a Year in Transition
According to the National Association of Realtors, the market is “frozen,” in which home sales activity has dropped for 10 months in a row. It’s the longest streak of declines since the group started tracking sales in the late 1990s.
Despite a slump in sales activity, home prices have not gone down. In November, the unsold homes inventory fell for a fourth month in a row.
An open house for a starter home in Hollywood was held on a recent weekend, but agents didn’t see many people like they did last year.
There is likely to be a return to the traditional seasonality of the real estate market, in which inventory tends to rise in February and carry through the summer. If you look at the calendar, you’ll see that prices tend to peak in May or June and sales tend to decline until the end of the year.
He said that locked- in homeowners would allow for more inventory to be made available, because of their ultra-low mortgage rates.
“Half of the country may experience small price gains, while the other half may see slight price declines,” said Lawrence Yun, NAR chief economist. San Francisco may be the exception with markets in California unlikely to experience price drops of 10%- 15%.
“Markets like Manchester, New Hampshire; Columbus, Ohio; Fort Wayne, Indiana; Hartford, Connecticut; Lancaster, Pennsylvania; or Topeka, Kansas are still seeing homes change hands as buyers from more expensive locations are lured by solid local economies and median prices, which in some cases are still below $300,000,” Ratiu said.
In November, as mortgage rates started a six-week tumble, the median monthly mortgage payment fell by 1.8% to $1,977 from $2,012 in October, according to the Mortgage Bankers Association.
“With interest rates still running well below the 7% range we saw in the fall, the psychological shock of the 2022 rate jump is wearing off for buyers, leading to a favorable adjustment in expectations,” said Ratiu.
In 2023, we may see a mirror image of 2022 — a somewhat trying first half that gives way to a surprisingly strong back half of the year for buyers, said Leonard Steinberg, corporate broker at Compass in New York.
The would-be buyers who stepped back from the market inlate 2022 can’t and won’t stay away forever, given the competative demands from first-time buyers and retirees looking to move or downsize.
Chronic under-building of new homes is also likely to remain a challenge across all market segments as builders grapple with the challenge of balancing a short-term decline in demand with the long-term need for more new housing, he added.
The Prospects of the Spring and New Year: The Case for a Wonderful Year in the Housing and Real Estate Markets, Revisited
Tucker said that the spring market will be busy and more competitive, while the next two months will be calm.
“The big surprise for a lot of people might be that the market has a really boring year,” said Tucker. It would be a big change of pace. A plain, boring, vanilla year in the housing market would be a wonderful surprise.”
The labor market would have to suffer a significant drop to move the needle on spending if there were more than 10 million open jobs. “This scenario is more likely if corporate executives overreact to the recession chatter and preemptively cut payrolls, which would create a self-fulfilling downward spiral.”
But traditional seasonal norms are expected to kick in come March as more inventory becomes available and more buyers starting to look at what’s available — as long as buyers can stomach the current rates and sellers are willing to give up the ultra-low rates they enjoyed in the past couple years.
He said that we may have to wait until the beginning of the spring shopping season for more clarity on the direction of housing markets this year.
We’re in the salad days of the New Year — that period where many feel refreshed and motivated and perhaps even optimistic about the year to come. There’s a certain clarity that comes during this time in January.
Fed Rate Increases, the Labor Market, and the Stock Market: Premarket Stocks Trading in a Resilient Economy. An Investors’ Perspective
In an interview with the Financial Times this week, Gita Gopinath, second in command at the International Monetary Fund, urged the Fed to continue with rate increases this year, citing the labor market’s resilience.
Will wages moderate this year? Analysts at Goldman Sachs predict that they will. Wage growth will slow to 4% by the end of the year from over 5% in 2022, as they believe unemployment will grow.
Bank of America CEO Brian Moynihan told CNN around the holidays that the continued strength of the US consumer is nearly single-handedly staving off recession.
Market sentiment waned last month after retail sales fell short of expectations, raising the odds that the Fed’s interest rate hikes will push the economy into recession.
The answer to this question will help determine what happens in markets this year and whether the economy will fall into recession.
In the minutes from the December Fed meeting, central bank officials spelled it out for interested parties: No policy makers anticipated that rate cuts would be appropriate in 2023. The minutes warned that “an unwarranted easing in financial conditions … would complicate the Committee’s effort to restore price stability.”
The officials were happy to have softer inflation reports, but they said that more proof of progress was needed and that inflation was still too high.
Source: https://www.cnn.com/2023/01/06/investing/premarket-stocks-trading/index.html
The Latest CoreLogic Case-Shiller US National Home Price Index (CNN) reveals that the US home prices have fallen for the fifth consecutive month in November through November 2022
The home goods chain said in its regulatory filing that it has doubt about its ability tocontinue due to its worsening financial situation.
Bed Bath & Beyond is planning to file for Chapter 11 within weeks according to sources cited by the Wall Street Journal. Bed Bath & Beyond did not immediately respond to a request for comment from CNN.
The latest S&P CoreLogic Case-Shiller US National Home Price index shows US home prices fell for the fifth straight month in November as rising mortgage rates caused more prospective buyers to leave the market.
Last July marked the first month-over-month decrease for the national index since February 2012 and that continued through November, with seasonally adjusted prices falling 0.3% month over month.
The cities in the 20-city index all experienced declines before seasonal adjustments. Detroit increased 0.1%, the only city to report an increase after seasonal adjustments.
Home prices rose 7.7% in November from the year before, a smaller jump than the 9.2% growth seen in October, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index, released Tuesday.
The cities of the South have reported the highest year-over-year gains among the cities in the index. Miami had a 18.4% price increase from the year before, followed by Atlanta. All 20 cities reported lower price increases in the year ending November 2022 compared to the year ending October 2022.
The November report provides evidence of the slowing housing market during the fall, said Lisa Sturtevant, Bright MLS chief economist, but it may not show the worst yet of the housing market.
“This one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price,” said Sam Khater, Freddie Mac’s chief economist.
The Feds actions are keeping mortgage rates low, as he predicts they will stay around 6% for the next few weeks.
The housing economists and those in the mortgage market will be watching the inflation report set for February 14 to see if the pace of price hikes continues to slow.
“For today’s buyer of a median-priced home, the down payment amount is lower than it would have been last summer,” said Ratiu. Affordability remains a challenge for first-time buyers, even though that is positive news.
The Mortgage Bankers Association (MBA) Confirms Recent Rate Increases in the U.S. After a Three-Month Breakup
Mortgage rates rose this week after four weeks of decreases, as a better-than- expected jobs report indicated that the Federal Reserve would continue hiking its lending rate in its battle against inflation.
The Federal Reserve chairman said that the economy is resilient and that the central bank may have to raise rates more than they’re priced in.
The tension between expectations and economic data will continue to seep through financial markets for several more months, said George Ratiu, Realtor.com’s manager of economic research.
The Mortgage Bankers Association says that mortgage applications are down by around half since November and that rates are nearly double what they were a year ago.
TheMBA expects purchase demand to recover heading into the spring but affordability continues to be a challenge.