Twenty-six percent of home searchers looked to move to another metro area in the third quarter of 2019, up from 25 percent the year before, according to a new report from Redfin. This is a new all-time high for the national share of home-searchers looking to relocate, likely driven by those leaving expensive metros in search of more affordable homes.
Moving In — Metros with the Highest Net Inflow
After two quarters at the top of our list of metro areas with the highest net inflow, Phoenix fell to number three in the rankings in the third quarter, passed by Boston at number one and Sacramento at number two. A net inflow means more people are looking to move in than leave, while a net outflow means there are more people looking to leave than people looking to move in.
Seventeen percent of home buyers searching in the Boston metro area were looking from other metro areas in the third quarter, up from both a year earlier (12.0%) and the second quarter (14.1%). New York continues to be the top origin city for people looking to move to Boston, and Boston is the top destination for people looking to leave New York.
Moving Out — Metros with the Highest Net Outflow.The list of metros people most-often looked to leave was once again topped by New York, San Francisco, Los Angeles and Washington, D.C. in the third quarter. Net outflow is defined as the number of people looking to leave the metro minus the number of people looking to move to the metro.Source: RedFin
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 3.500 MBS) lost just -7 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move sideways compared to the prior week.
Overview: Mortgage backed securities (which directly controls mortgage rates) moved in a very narrow range, testing an key technical support level located at the 100 day moving average all week. This kept mortgage rates nice and steady for the week.
Retail Sales: The headline reading for September was much lower than expected (-0.3% vs est of +0.3%). Part of that miss was due to an upward revision to August from 0.4% to 0.6%. When you strip out Autos, Retail Sales were down -0.1% vs est for a gain of +0.2%. August was revised higher from 0.0% to 0.2%.
The Talking Fed: We got the Fed’s Beige Book on Wednesday. You can read the official release here.
Here are a few key highlights:
- The economy expanded at a slight to modest pace since the prior report
- Household spending was solid on balance.
- Employment rose slightly amid reports of persistent worker shortages. Labor market tightness across skill levels and occupations was widely cited as a factor restraining hiring.
- Wages rose moderately in most Districts, with upward pressure noted for lower-skill workers in the retail and hospitality industries and for higher-skill professional and technical workers.
- Agricultural conditions deteriorated further due to the ongoing impacts of adverse weather, weak commodity prices, and trade disruptions.
Taking it to the House: Weekly Mortgage Applications increased by just 0.5%. Refinance Applications popped by 4.0% but Purchase Applications tanked by -4.0%. The October NAHB Housing Market Index hit 71 vs est of 68. September New Housing Starts were lighter than expected (1.256M vs est of 1.320M) but the weakness was in multifamily. The key housing market SFR actually made gains to 918K on an annualized basis. Building Permits were stronger than expected (1.387M vs est of 1.335M). SFR permits rose to 882K.
What to Watch Out For This Week:
The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.