Market Recap: Housing Numbers are Up and No Rate Hike, Yet

  • February 03, 2017

Mortgage rates did not move much this week, following the Federal Open Market Committee’s (FOMC) decision not to raise interest rates.  Despite a week-over-week drop in new purchase and refinance mortgage applications, monthly housing numbers posted strong gains.

After a 2.5% decline in November, pending home sales are up 1.6% in December.  The National Association of Realtors (NAR) reported gains in the South up 2.4% and in the West up 5% and declines of 1.6% in the Northeast and 0.8% in the Midwest.  Discussion of “tightened inventory” came up, with NAR’s chief economist Lawrence Yun stating, “The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs.  Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.”

The Case-Shiller Home Price Index for November showed a 5.3% year-over-year gain and a 0.2% increase from October.  Once again, the increase was driven by gains in the Pacific Northwest, specifically Seattle, Portland, and Denver.  David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee, said that the gains from the past two and a half years show “housing has recovered from the boom-bust cycle that began a dozen years ago.” 

The FOMC met on Tuesday and Wednesday of this week.  As expected, they voted to not raise interest rates.  Economists predicted that the FOMC would need a better idea of the new administration’s fiscal policies before making any major interest rate moves.  In the press release, the FOMC asserted that the economy “has continued to expand at a moderate pace.  Job gains remained solid and the unemployment rate stayed near its recent low.” 

After rapid gain toward the end of 2016, economists are predicting a steadier increase of mortgage rates throughout 2017.  With tightened inventory at the center of many housing discussions, prospective homebuyers are encouraged to start looking sooner as the process may take longer. 


Sources: Mortgage News Daily, Business Insider, HousingWire, Bloomberg

Cindy MacDonell
Senior Loan Officer
NMLS # 316198
Branch NMLS # 1270689

Cindy MacDonell

PHONE: (707) 781-8185

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).