Mortgage rates and Pending home sales February 2017

Mortgage rates and Pending home sales in February 2017 were a mixed bag.  Mortgage rates were high but pending home sales were fantastic.  As previously posted we’ve seen mortgage rates move higher since November 2016; post election due to the fear that a Trump Presidency will bring inflation and higher mortgage rates.  So far that has not happened as inflation has not jumped although some data points have shown improvements over recent months.  Mortgage rates seem to be range bound between 4.00% – 4.375% (30 year fixed mortgage rate).  The interest in buyers at this level of mortgage rates seems to have been negative although the pending home sale data for February 2017 was strong.  Keep in mind this “pending” home sale data and not closed sales so we’ll have to wait and see if these contracts close.  It will be interesting to see if the higher California mortgage rates cause some buyers to back out of certain contracts; this can happen when a buyer is gambling a bit on mortgage rates moving down prior to close.

Per Lawrence Yun, National Association of Realtors chief economist, said “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” he said. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

He added; “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”