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The Straight Truth

By Jennifer Beeston @ Guaranteed Rate Mortgage

By Jennifer Beeston | Mortgage Broker
or Lender in California

New home sales plunge; A little advice to the big boys

New home sales declined 13.4% in July.  That is the largest decline in the last three years. There are some in the media claiming that Realtors etc.. have been over representing how good the market is and that is why it happened. This is very inaccurate.  Home sales declined because rates jumped a full percent in a very short time.  In a market with limited inventory and prices moving up suddenly everyone who had been qualified, qualified for a lot less.  People qualifying for less + prices climbing+limited inventory= Stall in market.  This is not rocket science folks.  Rates jumping that high that fast was bound to stall the rebound.  As of Friday when this report came out we have seen rates come down.  Not a ton but enough to say OK lets go down more and try again.  So here is my low level advice to the big boys:  Let's go back to the high 3's and low 4's and then if you want to raise rates go easy, go slow and people will follow. Keep in mind this housing data lowered the dollars worth a bit more and that is just not good for any of us.

All my best,
Jennifer

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