U.S. existing home sales rose 1.7% in February to an annual rate of 4.09 million, beating expectations as lower mortgage rates and slower home-price growth helped bring buyers back into the market. The share of first-time buyers reached 34%, the highest in five years, showing improving affordability.
However, the housing market still faces challenges:
● Sales remain down 1.4% year-over-year.
● Housing inventory is still tight, with 1.29 million homes available—below pre-pandemic levels.
● The median home price rose slightly to $398,000.
● Limited supply, especially of starter homes, could push prices higher during the spring selling season.
Mortgage rates declined earlier in the year, helping affordability, but adding to the challenges, geopolitical tensions in the Middle East began to push Treasury yields and mortgage rates higher, slowing the recovery.
Also, oil prices have been super volatile, increasing in price from $65/barrel all the way up to close to $120/barrel. As oil continues to stay elevated this puts pressure on the bond market causing rates to increase quickly in the short term. When oil prices begin to normalize and decline, the bond market generally responds positively, and we should see interest rates decline once again.
Source : https://bit.ly/46SIfeu
By: Jon Iacono