AgentIndustry News

Long-term real estate rates may have ‘topped out’

Forecasters size up latest economic reports

The real estate event of the summer
Connect with other top producing agents at Connect SF, Aug 7-11, 2017

The 10-year T-note hovered near 4.35 percent this week, and mortgages have held their improvement to 6.125 percent, the best level since September. The predominant bond-market bet is still placed on a slowing economy, but until a slowdown actually appears in the data it's near impossible for long-term rates to do any better than they have. The Fed will on Feb. 1 hike another .25 percent to 4.5 percent, leaving the 10-year T-note badly exposed unless and until slowdown data appear. Long-term rates moved as low as they have over the holidays because the Fed has wigwagged a near end to its rate hikes, and because of the first, tentative signs of a slowing housing market. Just before Christmas, the November home sales data arrived weaker than a weak forecast: existing-home sales fell 1.7 percent (versus the negative 1.3 percent expected), and new homes were off 11.3 percent (versus minus 8 percent). Inventories of unsold homes rose to a 19-year high, but the time span overstates the actual...