Bluebid Buzz: December 1
As a benefit to the homeowners and homebuyers using our platform, I share a regular summary of housing market news and data driving our decision-making here at Bluebid Homes. We call it the Bluebid Buzz.
Disclaimer: Views expressed here are my own and not the views of my coworkers or anyone else. I am not a financial advisor, investment advisor, or housing expert. I’m just a guy who cares deeply about saving the American Dream of homeownership.
Here's the buzz for the week of December 1, 2022…
This week’s theme is mortgage relief on the horizon!
Federal Reserve Chairman Jerome Powell’s comments on Wednesday that smaller interest rate hikes could start in December sent equity markets sharply higher and could offer new mortgage borrowers much needed relief. While the Fed doesn’t set mortgage rates, its decisions are a primary influencer. Mortgage rates are priced above the 10-year U.S. Treasury, which has seen yields tumble nearly 11% in the last month.
Many frustrated buyers are about to catch a break, as WSJ reports the federal government will backstop mortgages in most markets up to $726,200 (an increase from $647,200). In the priciest markets, the practice will extend to a maximum loan size of $1,089,300. Backstop mortgages qualify to be underwritten by Fannie Mae and Freddie Mac and have lower down payment and credit score requirements relative to non-conforming loans.
CNBC reports Airbnb is partnering with landlords and tenants on a short-term subletting program to offer relief to those hit hardest by rising costs of shelter. The need for innovative platforms like Airbnb’s has never been greater, as the alarming inefficiency of the housing market led to median home prices up 6.6% annually in October despite 9 consecutive months of home sale declines, skyrocketing interest rates, and rising inflation. A hallmark of efficient markets – like the one we are building – is pricing that reflects available information (aka reality). Current market design requires long periods of inactivity in order for prices and broker fees to budge lower.
Closer to home, Greater Boston boasts the largest cluster of life science companies in the world thanks to the area’s competitive colleges and universities, access to funding, and world-class clinical research labs. Boston.com says all of this could be at risk, as the region faces one of the worst housing deficits in the nation and companies struggle with the question of whether local housing markets can reasonably supply their growth.
We surpassed 500 homes on our platform last weekend. While it’s a big milestone for us in the early days of the company, we have a lot of work to do in becoming the de facto housing marketplace in the United States. Thank you so much for your ongoing support.
Have a great week.