April 2nd, 2019 9:12 AM by Richard Sardella MLO.100007700/NMLS 233568
February sales jumped to an 11-month high
It’s good to get data from all over. But somehow when you get it from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, it seems even more official.
The two entities jointly announced the following new residential sales statistics for February. A total of 667,000 new homes were sold, 340,000 of them with a median sales price of $315,300. This is 4.9 percent above the revised January rate of 636,000 and 0.6 percent above the February 2018 estimate of 663,000.
The average sales price was $379,600. The seasonally-adjusted estimate of new houses for sale at the end of February was 340,000. This represents a supply of 6.1 months at the current sales rate. The March report is scheduled for release on April 23, 2019.
Bloomberg also reports on this, saying, “Sales of new U.S. homes rebounded to the best pace in almost a year and exceeded estimates in February, led by the Midwest, as lower mortgage costs helped buyers afford properties.” their key insights indicate a surprisingly strong gain to the best level since March 2018 is further evidence that transaction levels are stabilizing. “Mortgage rates that started to ease late last year and tax cuts are helping lure buyers. Meanwhile, other housing indicators, including starts and prices, have been cooling,” says Bloomberg. It goes on to say that new-home purchases are seen as a timelier barometer of housing than those of previously owned properties, as they are calculated when contracts are signed rather than when they close.
This marks the third release this month of new home sales data as the government catches up to its regular schedule following delays due to the shutdown. As mentioned, March figures will be released on April 23. For more information and to view the full schedule, visit in the Economic Briefing Room at www.census.gov/economic-indicators.
Source: US Census, Bloomberg, TBWS
How Rates Move:
Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgageand G-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Higher
Mortgage rates are trending higher this morning. Last week the MBS market worsened by -2bps. This caused rates to move sideways for the week. We saw relatively mild rate volatility throughout the week.
This Week's Rate Forecast: Higher
Three Things: These are the three areas that have the greatest ability to impact your mortgage rates this week. 1) Brexit, 2) Trade and 3) Jobs.
1.) Brexit: The European Union has scheduled an "emergency" Brexit meeting for April 10 as Great Britain has failed to pass anything by the March 31st deadline. While, Great Britain has voted to extend the deadline, that deadline cannot be unilaterally extended. Meanwhile, British Prime Minister Theresa May is attempting to hold yet another "indicative" vote on Tuesday, and the House of Commons is looking to plan another round of votes on Monday.
2) Trade: Fresh off of last week's meetings in China, Chinese Vice Premier Liu He will be visiting Washington on Wednesday for further discussions. Also, on the NAFTA front, the deal that was reached with Mexico and Canada is still not final as it has not passed through our Congress. Canada is balking at some tariffs that are still in place (and were not part of the deal), and Mexico is concerned that the U.S. is going to completely close down the U.S. - Mexico border as a series of "caravans" with thousands of people are attempting to violate our borders.
3) Jobs: There are several key domestic economic reports this week which include ISM Manufacturing and ISM Services, the later representing 2/3 of our economy. However, most of the attention will be on Friday's big jobs data dump. As far as Non-Farm Payrolls, we want to see just how much last month's reading of 20K will be revised. But MBS will react the most to the average hourly earnings on a Year-over-Year basis. It is expected to remain at the very lofty level of 3.4%.
This Week's Potential Volatility: High
While rates are ticking higher today, we're still at very low levels. Rate markets will be paying close attention to wage growth on Friday. A good number could cause rates to tick higher on elevated volatility.
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.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.