George L. Duarte - Mortgage Loans Fremont California Horizon Financial Associates

A Bidding War Is Taking Place Among Homebuyers While businesses have fallen on hard times during the past few months, there are signs that the economy is going to start to recover quickly. This could mean that homebuyers are entering the market again as well.

With summer being a historically hot time for homebuyers all over the country, there are a lot of experts saying that buyers need to get ready for a bidding war.

There are not a lot of homes on the market right now, as sellers are still a bit reluctant to put their homes back on the market with the economy just starting its recovery process.

The end result is that there is a disconnect between supply and demand. This imbalance is causing home prices to climb upward as homebuyers get into a bidding war.

Homebuyers Might Be Surprised

Many homebuyers are surprised that prices are actually rising instead of falling. When the last recession hit, home prices actually fell significantly. This is because mortgage defaults were the cause of the last recession, which is why home prices fell so dramatically.

The cause of this economic downturn is different. Due to a limited supply of homes, this is leading to more competition among homebuyers. This leads to more competition, handfuls of offers for a single home, and a bidding war. In order to find the right home, there are a few tips that homebuyers need to keep in mind.

Put Forth A More Competitive Offer

Those who are looking for a home right now need to place themselves in a position to compete against multiple offers from other homebuyers. Some of the most important tips to follow include:

Hire a local expert who understands the state of the market right now who can help homebuyers find the right home. Right now, the real estate market is not normal. It takes an expert to understand the ins and outs of buying a home in this market.
Get pre-approved from the market to make sure the offer looks serious to the seller. Those who get pre-approved from a lender will demonstrate a strong desire to buy, pushing their offer to the top.

There are ways to put forth a competitive offer even in this challenging real estate market.

Last week’s scheduled economic news included readings on inflation and retail sales. Weekly reports on mortgage

rates and new and continuing jobless claims were also released. In other news, the FHFA announced an increase in

fees charged by Fannie Mae and Freddie Mac for home loan refinance transactions.

Inflation Readings Mixed as Retail Sales Fall

Consumer prices rose by 0.60 percent in July and matched June’s reading. Analysts expected a July reading of 0.40

percent growth. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose by 0.60

percent in July and exceeded June’s reading of 0.20 percent and July’s expected reading of 0.20 percent price

growth.

Retail sales dropped to 1,20 percent growth in July as compared to June’s reading of 8.40 percent growth. July’s

retail sales reading fell short of the expected rate of 2.00 percent. Retail sales excluding the automotive sector rose

by 1.90 percent in July as compared to June’s retail sales growth rate of 8.30 percent Declining retail sales were

likely caused by a resurgence in Covid-19 cases in some areas.

State and local guidance on retail re-openings varied and likely impacted retail sales according to how Covid-19

regulations were interpreted and enforced. The federal government failed to enact a second round of stimulus

payments that would have provided Americans with extra cash for purchasing retail goods and services.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week; rates for 30-year fixed-rate mortgages rose by eight

basis points to 2.96 percent on average. Rates for 15-year fixed-rate mortgages rose by two basis points to 2.46

percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.90 percent. Discount points averaged

0.80 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 963,000 claims as compared to the prior week’s reading of 1.19 million new claims

filed and expectations of 1.08 million initial claims filed Continuing jobless claims were also lower than for the

previous week. 15.50 million ongoing jobless claims were filed last week as compared to 16.10 million claims filed

during the prior week. Falling jobless claims numbers could reflect the re-openings of business and rehiring of

employees. This progress could be short-lived as Covid-19 cases increased last week in some states where re-

opening may have been done too soon.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on

housing market trends, and Commerce Department reports on housing starts and building permits issued. Weekly

reports on mortgage rates and jobless claims will also be released.

What's Ahead For Mortgage Rates This Week - August 17, 2020 Last week’s scheduled economic news included readings on inflation and retail sales. Weekly reports on mortgage rates and new and continuing jobless claims were also released. In other news, the FHFA announced an increase in fees charged by Fannie Mae and Freddie Mac for home loan refinance transactions.

Inflation Readings Mixed as Retail Sales Fall

Consumer prices rose by 0.60 percent in July and matched June’s reading. Analysts expected a July reading of 0.40 percent growth. The Core Consumer Price Index, which excludes volatile food and energy sectors, rose by 0.60 percent in July and exceeded June’s reading of 0.20 percent and July’s expected reading of 0.20 percent price growth.

Retail sales dropped to 1,20 percent growth in July as compared to June’s reading of 8.40 percent growth. July’s retail sales reading fell short of the expected rate of 2.00 percent. Retail sales excluding the automotive sector rose by 1.90 percent in July as compared to June’s retail sales growth rate of 8.30 percent Declining retail sales were likely caused by a resurgence in Covid-19 cases in some areas.

State and local guidance on retail re-openings varied and likely impacted retail sales according to how Covid-19 regulations were interpreted and enforced. The federal government failed to enact a second round of stimulus payments that would have provided Americans with extra cash for purchasing retail goods and services.

Mortgage Rates Rise as Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week; rates for 30-year fixed-rate mortgages rose by eight basis points to 2.96 percent on average. Rates for 15-year fixed-rate mortgages rose by two basis points to 2.46 percent. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.90 percent. Discount points averaged 0.80 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims fell to 963,000 claims as compared to the prior week’s reading of 1.19 million new claims filed and expectations of 1.08 million initial claims filed Continuing jobless claims were also lower than for the previous week. 15.50 million ongoing jobless claims were filed last week as compared to 16.10 million claims filed during the prior week. Falling jobless claims numbers could reflect the re-openings of business and rehiring of employees. This progress could be short-lived as Covid-19 cases increased last week in some states where re-opening may have been done too soon.

What’s Ahead

This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market trends, and Commerce Department reports on housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims will also be released.

A Bidding War Is Taking Place Among Homebuyers

What’s Ahead For Mortgage Rates This Week – August 17, 2020

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