Shiver Me Timbers! Housing Market Behaving Like a Drunken Sailor!

Why is the Rum Gone? And the Homebuyers?

Savvy? It seems the housing market be playing hide and seek and not in a charming 'yo ho ho' kinda way. Seems potential homebuyers bless their cotton socks are scarpering faster than a monkey with a stolen doubloon. Applications for a mortgage to purchase a home have plummeted 3% last week according to those landlubber Mortgage Bankers. Why you ask? Why is the rum gone? Consumer sentiment that’s why! It's weaker than my sense of direction. Though compared to last year we're still 14% ahead. Small victories eh?

The Curse of the Adjustable Rate!

Now these mortgage rates be a fickle mistress. The average interest rate for a 30 year fixed rate mortgage for loans no bigger than a king's ransom ($806,500 to be precise) dipped a tad to 6.84%. Points however increased like barnacles on a ship's hull! What a tangled web we weave eh? It’s the lowest rate since April but only by a hair's breadth mind you. Just 10 basis points or as I like to call it a sparrow's fart in a hurricane.

Geopolitics and Tariff Troubles!

Joel Kan a wise man of the MBA reckons this be all down to financial market volatility stirred up by geopolitical conflicts and tariff uncertainties. "Even with lower average mortgage rates," he says “applications declined as ongoing economic uncertainty weighed on potential homebuyers.” Uncertainty! Now where have I heard that before? Oh yes every time I try to navigate with a compass and a bottle of rum.

Refinancing? More Like Refin fancing!

Even the lure of refinancing usually as tempting as a free barrel of rum couldn't coax folks in. Applications to refinance a home loan sank 2% despite the lower rates. Blimey! They’re still 25% higher than last year but who’s counting? VA applications however bucked the trend like a stubborn mule on Tortuga. A 2 percent increase in purchase applications and a slight increase in refinance applications says our friend Kan. Small victories I tells ya.

Loan Sizes Shrinking Like a Pirate's Booty After Taxes!

The average loan size be shrinking too down to a measly $380,200. The lowest since January 2023! Times are tough even for pirates savvy? You have to spend money to make money aye? I think...

Waiting for the Fed to Drop Anchor!

Now all eyes be on the Federal Reserve's announcement. Matthew Graham from Mortgage News Daily says it ain't about rate cuts but about the 'dot plot.' Sounds ominous don’t it? Like a treasure map drawn by a Kraken. In summary the housing market be a perplexing puzzle a treasure hunt without a map and a party where the rum's run out. But fear not! As I always say 'The problem is not the problem. The problem is your attitude about the problem.' And mine of course. Now where's that rum?