At the start of 2022, the MND average survey rate on 30-year fixed-rate mortgages was 2.76%.
This week, the MND average survey rate on 30-year fixed-rate mortgages topped the 5% mark for the first time since November 2018.
Historically, 5% is not that high of a rate. But relative to home prices it's an enormous rate, especially for first-time buyers.
Case-Shiller Home Price Index
Kicking off 2022, the Case-Shiller home price index continues the record pace of 2021.
For details, please see 2021 Set New Annual Records for Home Prices. 2022 Continues the Trend.
Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month
On March 18, I commented Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month
That decline was for February and most February sales were made in December or January when mortgage rates were mush lower.
At the end of January, the 30-year mortgage rate was about 3.68%. On March first the rate was 3.90%. On April 5, the rate was 5.02%.
Expect a Huge Housing Slowdown
Lumber futures have pulled back from recent highs but remain very elevated. That will resolve to the downside soon.
And the pending housing slowdown will impact demand for furniture, appliances, paint, landscaping, cabinets, etc.
Impact on GDP
The knock-on impacts will likely be greater, but that's significant.
Recession on the Horizon
The Fed does not see it, but a recession is on the horizon.
For discussion of recession signals, please see The Highly Watched 2-10 Inversion Recession Indicator May Not Be the Best Signal
This post originated on MishTalk.Com.
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