Good Thursday AM,
WOW! Shocker on PPI and unemployment claims ticked up.
Talk about inflation concerns fading.
The headline PPI number came in at -0.1 and the core number came in at -0.5. This low reading comes after a 0 number last month. I am quite surprised we are not seeing a bigger move. Earlier the move happened as I would have expected but we have since pulled back. You should be good to float, just watch the 3.5% level on the ten-year.
Yesterday, the Minutes of the Fed’s March meeting signaled officials appear on track to extend their run of hikes when they meet next month, while staff advisers forecast a “mild recession” later this year. Economists see the most likely outcome as a quarter-point increase in May, followed by an extended pause. But the language in the minutes, coupled with some officials’ comments and a still-uncertain outlook for the impact of credit tightening on the economy, point to a rate path that may not be fully settled.
Amid cooling inflation and rising housing costs, many first-time homebuyers feel more certain about their financial situations, according to a recent study from TD Bank. TD’s First-Time Homebuyer Pulse found that 54% of respondents indicate they are now better off financially than they were two years ago. And while homebuyers’ perception of the economy and affordability continue to draw concern, rising rent may be driving homeownership interest. Among those looking to purchase a home for the first time in 2023, 39% believe now is a good time to buy. Many who have begun their process are also showing signs of preparedness with 48% starting to save for a downpayment. Additionally, some 85% of respondents indicated buying a home was a good long-term investment.
And, here is some great intel from US News on a survey they ran two weeks ago..
- Two-thirds (66%) of 2023 buyers are waiting for mortgage rates to drop before home shopping. Thirty percent plan to wait until rates drop below 5.5%, and 28% want to see rates below 6% before entering the market. But more than a quarter (26%) are waiting for rates to drop below 5% – something that is not likely to happen during 2023. Perhaps unsurprisingly, 62% of respondents find it challenging to keep up with mortgage rates trends and news.
- Most homebuyers (62%) have had to reduce their purchase price budget due to higher mortgage rates. Among them, 39% are looking at homes in a different city with a lower cost of living – suggesting that motivated shoppers are willing to relocate for homeownership. Respondents also have had to shop for smaller houses (39%) or homes that need cosmetic repairs (37%).
- The vast majority (86%) are at least a little stressed about buying a home this year, with a fifth (20%) being “extremely” stressed about it. First-time homebuyers report being more stressed about purchasing a home this year than repeat homebuyers, who have been through the process before.
- The majority of respondents (61%) are first-time homebuyers. More than three-quarters of them (77%) regret not buying a home when mortgage rates were lower. However, 60% of first-time buyers have been saving up to buy a home for less than three years, so it would have been difficult for them to afford to buy when rates were at record lows.
- A quarter (25%) of homeowners who are buying another home this year won’t sell their current home. Of those who do plan on selling their home, most (56%) think they’ll regret giving up a mortgage with a much lower rate than what’s currently available.
- About four in five respondents are considering taking steps to get a lower mortgage rate, such as choosing a shorter loan term (37%), borrowing an adjustable-rate mortgage (34%) or purchasing mortgage discount points to buy down the rate (30%).
- Nearly three-quarters (73%) plan on shopping around with multiple lenders to compare rates. Of them, 40% will compare three lenders and 27% plan on shopping with two lenders. What’s more, 68% plan on refinancing to a lower mortgage rate in the future.
- The No. 1 priority for homebuyers when choosing a mortgage is having affordable monthly payments, with 35% of respondents saying so. That’s followed by getting the lowest interest rate possible (27%) and saving the most money over the entire loan term (21%).
Please remain safe and stay healthy, make today great!