US existing home sales rose by 0.8% for November as mortgage rates slip back below 7%. ResiClub Co-Founder and CEO Lance Lambert comments on the outlook for home sales if mortgage rates continue to slide lower.
"The question is how much can that number really move up with affordability still being strained and there still being some type of lock-in effect in the market," Lambert tells Yahoo Finance. "It does feel like the worst could potentially be behind us for existing home sales and that volumes will hopefully start to move up."
Lambert also discusses on the relation between mortgage rates and Treasury yields if the Federal Reserve were to enact interest rate cuts in 2024.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
This post was written by Luke Carberry Mogan.
Video Transcript
DIANE KING HALL: So, Lance, there certainly has been some loosening, especially when you take a look at today's data.
We know that you have your own data as well.
Does your data line up with, say, where we're putting a pen in this and you see some unlocking of demand, not just because of the seasonal changes that we typically see in the spring and summer when it comes to the housing market?
Is this a turning point that we're starting to see?
LANCE LAMBERT: I think what we're seeing is that most of this is going to be seasonal.
We're going to see a seasonal uptick.
But if rates stay here if we stay here for duration and we stay in the mid-6's and don't go back up into the 7's, And consumer confidence starts to realize, hey, maybe we aren't having a recession here, I think we'll start to get existing home sales moving up a bit.
The question is just how much can that number really move up with affordability still being strained, and there still being some type of lock-in effect in the market.
But it does feel like that the worst could potentially be behind us for existing home sales.
And that volumes will hopefully start to move up.
The question is just how much of an uptick we will see.
JOSH LIPTON: And, Lance, let's just dig into affordability a little bit more.
Mortgage News Daily, Lance, they're saying the 30-year fixed is at 6.64%.
You talk to a lot of smart folks.
Where do-- where do they see that heading?
Six months from now could we be testing 5.5%, even 5%?
LANCE LAMBERT: Yeah.
That is a great question.
And so as financial markets loosen, like we've seen over the past two months, and the 10-year Treasury yield comes down, and the MBS market gets more activity, you can see those rates come down.