The U.S housing market is about to do a Big U-turn downwards because mortgage Rates have surged over the past four Weeks so in today's video I'm explaining What's happening right now regarding Some Ford looking indicators of our US Housing market and it's not looking too Good now don't take my word just for it Because of Fannie Mae also had this Essay with mortgage rates rebounding Recently and a substantial decline in Mortgage applications this past week we Would expect any February bump in other Words an increase to be short-lived also According to the Mortgage Bankers Association or the MBA they expect a Combination of economic uncertainty High Mortgage rates and persisting Affordability challenges to impact Purchase the band this year in fact they Were reporting that the national meeting Mortgage payment was 1964 dollars per month in January and That's an increase of 437 dollars more Per month compared to 12 months ago Which equates to a 28.7 percent increase In your average monthly housing payment Also stay tuned here in just a little Bit because I'm going to be comparing Average monthly housing payments today Versus on February 1st this year given The fact that rates are nearing seven Percent right now which is absolutely Insane a giant increase in rates over
The past four weeks on top of that have A look at this this is actually Something I just found out this morning According to showingtime.com which is Absolutely insane here this is real Estate showings across North America According to your showing time so we Started the year at zero percent which By the way these numbers here are in Comparison to the first week of January This year this is only for 2023. so for The week ended February 21st real estate Showings increased by 14.1 percent Compared to the first week this year Look at this though the decrease Increased to 12.9 percent by the time we Hit February 25th then they went down to An increase of 12.1 percent as of February 26. look at this though joint Decrease boom right there for February 27th a decrease of 0.6 so for the week Ended February 27th which by the way This is a seven day moving average so For the weekend in February 27th uh There's approximately 0.6 percent less Real estate showings in North America Compared the first week this year now Keep in mind right after the Super Bowl In general we tend to see a huge Increase in home buying demand a lot of Real estate showings more new listings But this year we're seeing just the Opposite a giant decrease in real estate Showings across North America and also
Take a look at this compared to 2022. During this time in 2022 we actually saw A 13.7 increase compared to the first Week of 2022. now again this year down By point six percent let's also include A 2020 and 2021 because in 2020 we were Up by 20.8 percent 2021 up by 19.4 Percent so for 2020 through 2022 we were Up by double digits compared to the First week of those years now we're down By almost a one percent to me this is a Really good afford looking indicator of Our healthy Market given the fact There's a huge decrease in home showings Across North America now of course Disclaimer here this is not a measure of Every single real estate showing across From North America it's only based on Real estate agents who actually use Showing time in order to show houses to Their clients but still a snapshot of What's happening right now overall in U.S so here's another report that was Actually just announced this morning as Well which is just absolutely insane as Well I don't know how many times I'm Going to say insane but I was really Blown away by this giant decrease this Year for Real Estate showings I mean I Was really kind of scratching my head Why uh real estate showings were Increasing so much in the second half of February given the surge in rates but Right here boom that's just remarkable
Anyways I'm just kind of astounded by The data in today's video anyway so this Is also report from the mortgage bangers Association or the MBA that was just Posted on March 1st which is today I Hope you guys appreciate these timely Housing market updates and of course you Do please that like button of course Subscribe as well if you haven't done so Already that's my only advertisement I'll say in today's video so mortgage Applications overall decrease by 5.7 Percent compared to the rate before that And this is for the weekended February 24th this year of course applications Includes refi's plus purchases so refi's Actually decreased by six percent Compared to the previous week it's down A whopping 74 compared to the same week In 2022. meanwhile their purchase index Decreased by six percent compared to Last week and was down a whopping 44 Compared to the same week one year ago Which of course their purchase index is A measure of the number of people who Are submitting applications for Home Loans to buy houses down by 44 I Compared to 2022. uh but wait there's More foreign Vice president and deputy chief Economist he said the 30-year fixed rate Increased to 6.71 percent last week this Is based on a weekly survey from Freddie Mac which I'm not a fan of I actually
Really like to look at Daily rates According to the Moore's News Daily Especially in an environment where rates Have been fluctuating so much on a daily Basis here which again I'll share that With you guys here in a little bit and Joel Khan says after a brief Revival and Application activity in January when Mortgage rates drop to 6.2 percent there Has now been three consecutive weeks of Decreases so take a look at this because This is absolutely I'm not going to say Insane remarkable right not this this So here is the 10-year treasury note is Actually at 3.996 percent uh as of what Is this uh just about noon on um the First of of March actually refresh this Because about five minutes ago we're Actually we're over four percent an Increase of about eight basis points Compared to uh yesterday and the reason Why I'm sharing this is that this is Tied directly to mortgage rates because When the yield increases on the 10-year Uh so can rates on mortgages because the Yield has increased by about eight basis Points today look at these rates today For average 30-year fix uh rate Mortgages for people with exceptional Credit so according to investopia.com as Of today rates at 7.05 percent also according to the Morris News Daily Um as of today average rates for people
With great credit again 6.94 a nine basis point increase Compared to yesterday Also for a VA at six point three nine Percent FHA at 6.37 Also something worth noting here as well Is that at six point nine four percent For a 30-year fixed rate mortgage that's Not too far off the 12 month high that We saw at the end of October at Approximately 7.4 percent so take a look At this because again rates right now Six point nine four percent one year ago The average was 3.9 percent and that Equates to an increase of 304 basis Points or an increase of 3.04 percent Points compared to 12 months ago another More a significant way to look at this Though is that rates have increased Approximately one percent point over the Last four weeks alone on February 2nd Rates are at 5.99 now they're at 6.94 the significance regarding this Rise in rates by about one percent point Or last four weeks is that for every one Percent rise in rates that causes a 10 Decrease in buyers purchasing power That's number one number two is this Right here looking at your increase in Your average monthly housing payment so For a home buyer looking to buy a 450 000 home uh putting five percent down At 5.99 which by the way was the rate Set on uh February 2nd this year
Approximately four weeks ago your Housing payment which is just principal And interest would be 2 560 per month Look at today's rate sale at 6.94 again 450 000 5 down your new housing payment Would be two thousand eight hundred and Twenty six dollars per month and that Equates to an increase in four weeks Alone an increase of 267 dollars more per month to buy the Same house versus one month ago so again For someone looking to buy a 450 000 Home putting five percent down you're Gonna be paying approximately 267 dollars more per month versus that Same house just four weeks ago now Here's something else if you guys are Looking to buy a house or just Interested in the housing market in General is that this is going to cause a Home buying demand to decrease greatly Due to a lack of housing affordability Once again we did have an increase of Housing affordability when home prices And rates were decreasing but now what We're seeing right now is that home Prices have been relatively flat ever Since really November and December last Year but again we're seeing this giant Increase in rates over the past one Month and of course because we're seeing This increase in rates that's causing a Lack of housing affordability in the US And going back into the mba's report
Here Joel Khan said data on inflation Employment and economic activity have Signaled that inflation may not be Cooling as quickly as anticipated which Continues to put upper pressure on rates He's absolutely correct regarding this Because inflation is not cooling off as Expected or not cooling off as fast as Expected it's remaining sticky to say The least so because of this this is why We're seeing this upper pressure on Mortgage rates right now because the FED Is going to have to continue racing the Throttle funds rate in order to combat Inflation and because rates increase so Much in February the mba's purchase Index is at a new 28-year low for the Second consecutive week now here's Another way to look at this because Again the purchase index falling to this Lowest levels in 28 years going back to Approximately April of 1995. so home buying demand for loans in Order to buy houses at the lowest level Since approximately April of 1995. and of course the reason for that Is it's trying to increase in rates that We've been seeing ever since really the Last half of 2021 going from 3.11 on December 27 2001 all the way up to approximately Some percent uh by March of this year Here's what you also know as well Because according to the National
Association of Realtors for their Central Lock home showing support and Central law block is a lock box company In which real estate agents use in order To get access to keys to the house in Order to show houses to their their Clients so more or less it's a blue lock Box you enter a code on your app it Opens a lock box you get the key to the House open the door and show the house To your clients that's what's called a Central lock lock box so on a national Level for January this was actually just Released on February 23rd home showings Across the US were down 12 on a year of Your basis so fewer real estate showings Across the United States compared to one Year ago down by 12 percent the Significance regarding this as well I Always want to give you guys some Context because even though there's Approximately what 70 percent more Houses listed for sale in the US Compared to 12 months ago home showings Were still down by 12 percent in fact They also reported that home showings Were down in each of the four major Regions as well the Northeast they fell By 10 percent on a year-over basis the Midwest down a whopping 23 percent the West decreased by 16 in the South Decreased by one percent compared to January of 2022. here's what we also Know as well because according to Redfin
For the Forex ended February 19th this Year new pending home sales in other Words when a house is listed for sale It's for sale and when the seller Accepts an offer that becomes a new Pending home sale so new opinions Decreased by 17.4 percent for the Forex Added February 19th this year in fact When we expand this to look at 2020 Through 2023 the number of new pending Home sales is approximately 75 000 right Now at least for the Forex ended February 19th this year back in 2020 as Well which is the red line in 2022 which Is the black line right here during that Same time frame during those years There's approximately 90 000 new pending Home sales back in 2021 this time there Was 95 000. in other words we're seeing This huge decrease of contracts being Signed over the past several years so What's your biggest takeaway from Today's video I'd love to hear from you Guys please comment below Um also of course I appreciate you guys Watching this video and of course Appreciate you as well hope you guys an Awesome day I look forward to seeing you On the next video Foreign [Music]
