This Week in Greater Phoenix Housing 9/27/2021

In this 10 minute video, Amber Kovarik and I discuss the Federal Reserve’s September 22nd announcement stating the start of the bond and mortgage backed security purchase tapering will likely start this year and the expected impact it will have on mortgage interest rates. Click to watch or read my notes below.

This is an urgent message for any buyer that is on the fence about a refinance or purchase. Mortgage rates are going up, SOON.

Affordability is already being challenged. Rents are increasing, sales prices are increasing, and soon, without the benefit of low interest rates, homes will get even more expensive.

Rents are expected to continue increasing. Greater Phoenix rental occupancy is at its highest rate in over 40 years! Occupancy rates are 97.1%, the highest since 1978.

The $120 billion spent monthly on BMS and bond purchases have grown the Federal Reserve’s debt holdings up to nearly $8 trillion.

When interest rates rise, inflation slows. The Fed may be attempting to slow the rate of appreciation, which has slowed some over the past few months. The supply chain challenges continue to put pressure on the existing supply and thus increasing prices.

Despite inventory being up 42% from its lows in April, it is still incredibly low and demand continues to exceed supply.

Ivy Zelman said that 54% of American borrowers have a rate at or below 3.75%. If rates exceed 3.75% we could see more people opting to stay in their current property, which would only continue the low inventory challenges of today’s market.

Since the Fed’s announcement on September 22, mortgage rates have increased by 11 basis points.

Published by Sarah Perkins

Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.

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