Mortgage Rates surge as jobs report exceeds expectations, inventory grows in HSV market
The average 30-year fixed rate mortgage rate jumped an incredible 27 basis points Friday morning, following the release of a Labor Department report.
The report showed that the U.S. economy added many more jobs in the month of September, 2024 than had been anticipated, with unemployment falling to 4.1%.
This report is expected to convince the Federal Reserve to lower interest rates at a much more gradual pace than last month’s rate cut, which was twice the size as had been expected.
“The Fed’s decision to cut by 0.50 vs 0.25 last month had much to do with the fear/expectation that reports like today’s would be in shorter supply going forward,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “The only salvation here would be the notion that this is just one jobs report in a recent run that’s been mostly weaker and that perhaps the next one won’t be so damning for bonds.”
Michael Fratantoni, Chief Economist for the Mortgage Bankers Association, also weighed in on the report and its impact writing: “we do expect that mortgage rates will stay close to 6% over the next 12 months.”
Nationally, limited inventory continues to be a persistent issue in addressing housing affordability.
Realtor.com’s Monthly Housing Market Trends report shows a 35.8% year-over-year inventory increase for the month of August, with some agents reporting that housing prices are beginning to soften as the number of houses for sale rises in many areas across the country.
Here in the Huntsville/Madison County market, a weekly report compiled by HAAR, the Huntsville Area Association of Realtors, dated to the week of September 21, shows inventory coming online here as well.
Single family units saw a 34.1% increase, to a total of 4,204 available units, while townhouse, condo units saw a 168.8% increase, representing 376 new units available.
Pending sales in our local market also increased, with single-family units seeing a rise of 8.8%, and townhouse units increasing by 8.3%.
New listings of single-family units were up by 5.7%, while new listings for townhouse units rose by 46.7%.
And finally, the destruction wreaked by Hurricane Helene, which caused an estimated $6 billion in damage and a yet-to-be-determined and far larger amount to uninsured homes, caused a change to the way that Zillow will begin selling real estate from now on.
Climate risk firm First Street will begin displaying climate risk data for every property for sale listed on Zillow.com. This is after reports show that many of the houses destroyed or damaged in Helene were not covered by flood insurance, due to them not being within FEMA designated flood zones.
The new data suites will show First Street risk assessments for floods, fires, damaging winds, and heat, with projections formulated for the next fifteen to thirty years in the future.
“A lot of people think that they are safe from flood if they’re not in a FEMA flood zone, and that’s decidedly not true. Heavy rainfall can affect many, many people across the country, and there’s no indication from the FEMA flood zone designation that that is a risk for you,” said Ed Kearns, chief science officer at First Street. “We’ve created these new flood maps that do bring that into account, that will allow consumers to make that informed choice about whether they need flood insurance.”
A survey conducted by Zillow showed 80% of buyers now consider climate risk as a factor when purchasing real estate, with flooding listed as the primary concern by respondents, followed by fires.
As always, the Huntsville Business Journal will continue to monitor new developments in the real estate market, both nationally and here at home.
