Homes with experience are selling better than expected these days. According to the National Association of Realtors (NAR), sales of previously owned homes rose sharply in February, a sign that demand for housing picked up as mortgage rates eased last month.
According to the report there was an 11.8% increase in February from the prior month to a seasonally adjusted annual rate of 5.51 million, according to the report, while economists surveyed by The Wall Street Journal had expected sales to rise only 3.2% to a rate of 5.1 million in February.
The NAR said there were 1.63 million existing homes available for sale at the end of February, up 3.2% from a year earlier and representing a 3.5-month supply at the current sales pace, and its chief economist, Lawrence Yun, said the latest data represent a “powerful recovery” in existing home sales. He credits it to lower interest rates and increased inventory. The strong labor market and wage growth are also contributors.
This represents the strongest percentage increase since December 2015, according to Yun. And this data indicated housing could be poised to recover this spring after starting the first quarter on less than even ground.
The national median sale price for a previously owned home last month was $249,500, up 3.6% from a year earlier. While sales in the Northeast were flat, but in the Midwest they rose by 9.5% in the Midwest. Out West sales rose 16% in February from January. The South saw sales rise by 14.9% from January.
Mortgage Market Update — March 25, 2019
In this week’s Mortgage Market Update, we’ll take a look at how rates are currently trending, plus the three things that have the greatest ability to affect rate movement in the coming days. But first, let’s review how mortgage rates move.
How Rates Move:
Conventional and government (FHA, USDA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS), which are traded in real time, all day in the bond market. Therefore, mortgage pricing (interest rates) moves throughout the day and can be affected by economic or political events. When MBS pricing is on the rise, mortgage rates typically falls. When MBS pricing drops, rates usually go up.
It’s very important to track these securities in real time. For more information about the rate market, contact us directly. The Kelly Decker Team is among the few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market improved by +50bps. This was enough to move rates lower last week. We saw high rate volatility throughout the week.
This Week’s Rate Forecast: Neutral
Three Things: These are the three things that have the greatest ability to impact mortgage rates this week. 1) Geopolitical, 2) Trade and 3) Inflation.
1) Geopolitical: Brexit continues to take center stage as Prime Minister Theresa May’s cabinet is in full revolt. In a last-ditch effort to get the very unpopular deal pushed through before the deadline, May is offering to resign IF they pass her deal. This deal could be extended to May 22nd or April 12th depending on how some votes go. The markets are also concerned about the military escalation in Israel.
2) Trade: Trade Representative Lighthizer and Treasury Secretary Mnuchin are visiting China this week. With the Mueller investigation over, it’s believed that trade talks may take a step forward now that China has confidence in leadership in the U.S.
3) Inflation: We will get the Fed’s key inflation measure on Friday with the PCE report. The markets are expecting the Core YOY number to remain below 2.0%.
Treasury Auctions This Week:
03/26: 2 year note
03/27: 5 year note
03/28: 7 year note
The Fed This Week:
03/25: Charles Evans, Patrick Harker
03/26: Patrick Harker, Eric Rosengren
03/27: Esther George
03/28: Raphael Bostic, John Williams, James Bullard
03/29: John Williams
This Week’s Potential Volatility: Average
After mortgage rates had a great run last week, we’re looking for a calmer day today and throughout the week. Rates are at a critical juncture. We’ll be paying close attention to whether we can push lower, we move sideways or rates start to drift higher.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
If you’re searching for home financing opportunities in the state of Texas, please reach out to us for a free, no-obligation mortgage consultation and rate quote. We offer a variety of home loan products to suit just about any home buyer or homeowner looking to refinance.