Home sales in the U.S. saw quite a boost in March, as the existing-home sales data reflected a 4.4% increase – higher than the 2.5% estimate. In terms of actual homes, that translates to 5.71 million units in March versus the 5.60 million forecast.
The median existing home price for all housing types in March was $236,400, up 6.8% from March 2016 when it was $221,400. The increase in March’s median existing-home price marks the 61st consecutive month of year-over-year gains.
By the end of March, total housing inventory had risen 5.8% to 1.83 million existing homes available for sale but was still 6.6% lower than a year ago when it was 1.96 million. This figure has decreased year-over-year for 22 consecutive months. As housing inventory gets tighter, home prices tend to rise, which could help explain the 6.8% increase in median home price.
Unsold inventory is currently at 3.8-month supply at the current sales pace. This is unchanged from February’s reading. In general, a 6-month supply is indicative of a balanced housing market. When the figure is lower, it indicates a seller’s market and when the figure is higher, it indicates a buyer’s market. Clearly, the country’s housing market is currently favoring sellers. However, that doesn’t mean there aren’t still great homes to be found for reasonable prices. And with affordable financing plans available, hopeful buyers can certainly enter the market with confidence. The keys are to be prepared for your market’s conditions, work with a top-notch real estate agent, and partner with a mortgage company that can help you find a home loan that makes sense for your needs and budget.
If you’re buying a home in the state of Texas, please let us help you take the first steps toward homeownership by getting you preapproved. Simply reach out to us via the form on this page or call us at (972) 591-3097.
And now, here’s our look at this week’s Mortgage Market Update:
- Rates Currently Trending – Neutral
- 7-Day Forecast – Neutral
- This Week’s Potential Volatility – Average
Currently Trending – Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market worsened by -25bps. This was enough to worsen mortgage rates or fees. Mortgage rate volatility last week was fairly low. We could see increased volatility this week.
7-Day Forecast – Neutral
Three Things: These are the three areas that have the greatest potential to impact mortgage rates this week. 1) Central Bank 2) U.S. politics and 3) Domestic.
1) Central Bank: The focus will be on Thursday as we hear from both the Bank of Japan and the European Central Bank. From the ECB side, we want to know more about the amounts and timing of their reduced monthly bond purchases (started in March). Also, their economic data has been very strong as of late, and it will be interesting to hear how President Mario Draghi addresses future rate plans. For the BofJ, we will be looking to see if they move off of their negative interest rate position.
2) U.S. Politics: As Congress returns from a two-week break, it’s “game on” this week. Of note, is Wednesday’s announcement from President Trump on more details of his proposed tax levels. The administration has walked backed expectations on the level of detail that will be in this announcement, but any clarity on what he is going to push through could have a significant impact on mortgage rates. We also are facing yet another government shutdown deadline on Saturday which is also his 100th day in office. Defunding of Obama care and budget changes will be key negotiations this week. And of course, during all of this, it appears that they are getting prepared to make another run at healthcare reform.
3) Domestic Flavor: This week we have some strong economic releases that for a change could influence mortgage rates. The focus will be on Thursday’s Durable Goods Orders Ex-Transports as a proxy for business/capital spending. Next up will be Friday’s GDP data where we get a first look at the first QTR GDP.
Treasury auctions this week:
- 04/25 2 year note
- 04/26 5 year note
- 04/27 7 year note
Fed: We hear from Neel Kashkari (yet again) and then we enter the “blackout period” where the Fed is prohibited from speaking until the May 2-3 FOMC meeting.
This Week’s Potential Volatility – Average
We expect mortgage rates to be relatively stable today, but this week we could see some volatility. The markets will be paying close attention to the government shutdown, tax cuts, ECB and the strength of the US GDP.
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