Stocks are higher and Mortgage Bonds are slightly lower as we kick off Election Day. Later this afternoon at 1:00pm ET there will be a 10-year Treasury Note Auction, which could impact the Bond market, depending on the level of demand. A strong auction would likely help yields move lower.
CoreLogic Home Price Insights
CoreLogic reported that home prices rose 0.02% in September, which was less than estimates of 0.1%. Appreciation gains have clearly slowed, as they always do this time of year due to seasonality. Year over year, home prices are up 3.4%, which is down from 3.9% in the previous report.
CoreLogic forecasts that home prices will fall 0.1% in October and rise 2.3% over the next 12 months, which is likely conservative. CoreLogic’s appreciation data has been weaker than Case Shiller’s, which is considered the gold standard in tracking the changes of residential real estate values.
ICE Home Price Index
Black Knight reported their Home Price Index yesterday, showing home values rose 0.14% in September and are now up 2.9% year over year, down from 3% in the previous report. Home prices continue to appreciate, albeit at a slower pace, again as is typical during this time of year.
US mortgage holders have $17.2T in equity as of Q3 2024, including $11.2T in tappable equity that could be borrowed against while still maintaining a 20% equity stake in their homes or 80 LTV. The average homeowner now has $319K of equity in their home, of which $207K is tappable and can be used for things like paying off debt. According to Lending Tree, the average individual has $38,000 in non-mortgage debt. That is per individual and could be double within a household.
Many are not taking cash out or doing a HELOC because of rates, but do a blended rate analysis for your customers. While they may have a low mortgage rate, their blended rate may be much, much higher, depending on the amount of non-mortgage debt they have. Doing a cash out refi may make sense, and will even more so when rates cycle lower again.
Technical Analysis
Mortgage Bonds continue to trade in a wide range between support at 100.43 and overhead resistance at the 200-day Moving Average. When in such a big range, Bonds are susceptible to big price swings before reaching a technical level, so we must remain on guard.
The 10-year is once again battling with important overhead resistance at the 4.33% Fibonacci level, which is a key line in the sand. After getting back under it yesterday, we are slightly above it today. If this level does not hold, the next stop is likely 4.50%. On the other hand, there is a lot of room for improvement if Treasuries can catch a bid, as the next floor is the 200-day at 4.19%.
The technicals will take a back seat to the election results and Fed decision on Thursday. Be prepared for volatility.
Get notifications when agents you follow schedule open houses, complete a transaction with another loan originator, post a new listing, or share content on social media.Start your trial now so you never miss an opportunity to connect with new or existing referral partners.
Create 60 second videos for clients with Social Studio, and take advantage of social share assets that help you start conversations and highlight the benefits of buying.
Show clients how they can take advantage of a cash-out refinance or restructure their debt to save them years of mortgage payments, or demonstrate how debt consolidation can bridge the gap in payment differential on a more expensive home. With personal debt balances at an all-time high, use Debt Consolidation to help your clients achieve their financial goals and gain a better position to build wealth for their family.
Demonstrate how delaying a purchase for even a year or two could cost buyers thousands in appreciation, amortization, equity and more. Increase deal flow by showing clients how delaying their purchase could have more of an impact on their long-term wealth than they realize.
