Shelter Six: Homeownership Rates Continue to Surge

November 12, 2018 by · Leave a Comment 

1. As expected, the Federal Reserve held off on raising short-term rates at last week’s policy meeting but left the door open for another rate hike in December.

2. October’s Producer Price Index came in a good bit higher than expected and was 2.9% higher than a year ago. Higher inflation is never good for rates.

3. Homeownership rates continue to surge evidenced by 1.5M more households formed in the 3rd Quarter compared to a year ago.

4. The pace of the number of new households formed is on track for the best year since 2004.

5. The 35 and under age group is leading the charge with a homeownership rate of 36.8% in the 3rd Quarter, the highest level in five years.

6. With a strong economy and the millennial generation hitting peak housing demand age, housing demand should be strong for years to come.

 

Rate Update

Reaction to the inflation data, the Fed meeting, and the midterm election results was minimal, and mortgage rates ended the week with little change.

 

This Week

The Consumer Price Index (CPI) will come out on Wednesday and Retail Sales on Thursday. The mortgage markets will be closed today in observance of Veterans Day.