Rates fell again primarily in response to negative economic data, including revised data that showed the economy shrunk more than we thought in Q1 along with more recession indicators and predictions.
The 10 Year Treasury, which correlates closely to mortgage rates, hovered near 3.5% only a few weeks ago – but it is now under 3.0%!
I bring this up again because it is proving the likes of Jeff Snider and Barry Habib were correct when they predicted a recession, and the market is already pricing it in.
Borrowers Concerned About Rates Can Refi Later
The other reason I bring this up is to again comfort buyers who are concerned about “high rates today.”
The recent “proof” that recessions (and predictions of them) bring down rates is also “proof” of the likelihood of a much sharper reduction in rates once a recession actually sets in or is “officially acknowledged” (given that many think we are in a recession now).
What this means is that today’s buyers will almost certainly be able to refi into a lower rate.
What About Timing The Market?
The increased number of listings and decreased number of buyers in the market simply make for more opportunities for buyers who are still in the market.
Many buyers unfortunately are trying to “time the market” by waiting for some sort of price correction, but I think that is a very dangerous game because I have seen so many buyers get burned by the strategy over the years.
I blogged about this in May: WHY TIMING THE MARKET NEVER WORKS!
“Jay, Higher Rates, Fewer Buyers, More Listings, And A Recession Will Force The Market To Correct!”
I get emails like that from time to time from borrowers who read my blogs or newsletters.
And that is why I wrote this recent blog: RECESSIONS ARE OFTEN GOOD NEWS FOR REAL ESTATE!
In that blog, I explain that real estate typically does quite well in recessions in response to falling rates, and how 2008 was the exception to the rule (that is influencing everyone’s thinking today)
And, in this recent blog, I explain WHY OUR HOUSING SHORTAGE WILL KEEP REAL ESTATE PRICES STRONG.
I also frequently remind readers that vastly slowing or more normal appreciation does not mean “depreciation.”
And, in regard to higher rates killing the housing market, please see above – as it looks very likely that higher rates are not here to stay.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167