Boston Condos for Sale and Apartments for Rent
How the recent bank failure can impact the Boston condo for sale market
The initial effects of the bank sector upheaval that began a week ago have reached the housing market. So far, it isn’t all bad news—but it will take time to see how the recent changes play out.
Treasury yields fell last week as the failure of Silicon Valley Bank shook financial markets—bringing mortgage rates down with them. The average rate on a fixed 30-year home loan was 6.6% as of Thursday, according to Freddie Mac’s weekly survey—down 0.13 percentage points from the week prior.
Reported on a weekly basis, the drop in rates looks like a swift improvement to one of the two major factors in determining a buyer’s monthly payment—but daily readings tell a different story. Mortgage rates measured by Mortgage News Daily fluctuated significantly from day to day as market participants sized up banking concerns and Federal Reserve’s next move. By midday on Friday, Mortgage News Daily’s rate was 6.55%, down from 6.69% the day prior.
Home buyers and the housing market are “riding the roller coaster wave of mortgage rates,” says Skylar Olsen, Zillow Z +0.10% ‘s chief economist. Mortgage rates last week hadn’t fallen as much as the 10-year Treasury yield TY00 –0.42% would imply, Olsen said. “What that means is that there’s there’s a lot of uncertainty in the secondary mortgage market,” she added.
It’s also too soon to say whether mortgage rates will remain lower. This week’s Federal Open Market Committee Meeting will likely play a part in mortgage rates’ trajectory from here.
While the banking-sector upheaval might help buyer demand via lower rates, it could weigh on supply as home builders have a harder time obtaining loans, the National Association of Home Builders said last week.
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Source: Barons
