How Capitol Hill Chaos Affects The Mortgage Market

Turmoil in Congress is making headlines, but will it impact the economy – and the mortgage industry – more broadly? The House this week voted 216 to 210 to remove Kevin McCarthy (R-CA) from his position as speaker. He was the first speaker to be ousted through a vote in the middle of a congressional term. No new speaker has been appointed, though several Republicans have put themselves in the running. “It’s uncharted territory because we’ve never done that in the history of the United States,” Matthew Green, a politics professor at Catholic University, told CBS News. The short-term impact of this week’s turmoil has been felt immediately in the mortgage market. Redfin Economic Research Lead Chen Zhao said that…

Average Rate Comes Close To 7%

The average interest rates closed in on the 7% mark last week, pushing affordability further out of reach for many Americans. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.96%, up from 6.81% the week prior in the second week of 10+ bps jumps. A year ago at this time, the 30-year FRM averaged 5.51%. The 15-year fixed-rate mortgage shot up as well, from 6.24% to 6.30%. A year ago, it averaged 4.67%. “Incoming data suggest that inflation is softening, falling to its lowest annual rate in more than two years. However, increases in housing costs, which account for a large share of inflation, remain stubbornly high, mainly due to low inventory relative to demand,” said…

Home Sales See Biggest YOY Drop On Record

Home sales plummeted by 35% in November but there are early signs that demand may be picking up. Redfin’s latest data found that home sales dropped 35.1% YOY in November on a seasonally-adjusted basis. High buying costs kept both buyers and sellers on the sidelines. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes,” Sam Khater, Freddie Mac’s Chief Economist, noted. “Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below four percent.” Sellers have hesitated to put their homes on the market, knowing they’ll have to buy a new…