Single-family home prices rose more than expected in May according to the new release of the Standard and Poor’s/Case Chiller home price index.
The 20-city composite price index rose 0.5% in May and April was upwardly revised to an increase of 0.6%. Economists had been expecting a smaller gain in the range of 0.2%. While these monthly increases appear small, they do indicate a trend towards housing stability after the bottom in 2009. The index showed a 4.5% increase on a year-over-year basis and it is the 14th straight month of improvement in this report.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +66 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were the result of concerns about the stability of our economic recovery. While we had a week of stronger than expected housing data across the board, the market reacted to a lower than expected economic growth rate (GDP) and deflationary concerns.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 2-Aug | 10:00 | Construction Spending | June |
| 2-Aug | 10:00 | ISM Index | July |
| 3-Aug | 8:30 | Personal Income | June |
| 3-Aug | 8:30 | Personal Spending | June |
| 3-Aug | 8:30 | PCE Prices – Core | June |
| 3-Aug | 10:00 | Factory Orders | June |
| 3-Aug | 10:00 | Pending Home Sales | June |
| 3-Aug | 14:00 | Auto Sales | Jul |
| 3-Aug | 14:00 | Truck Sales | Jul |
| 4-Aug | 8:15 | ADP Employment Change | Jul |
| 4-Aug | 10:00 | ISM Services | Jul |
| 4-Aug | 10:30 | Crude Inventories | 31-Jul |
| 5-Aug | 8:30 | Continuing Claims | 24-Jul |
| 5-Aug | 8:30 | Initial Claims | 31-Jul |
| 6-Aug | 8:30 | Nonfarm Payrolls | July |
| 6-Aug | 8:30 | Nonfarm Payrolls – Private | July |
| 6-Aug | 8:30 | Unemployment Rate | July |
| 6-Aug | 8:30 | Hourly Earnings | July |
| 6-Aug | 8:30 | Average Workweek | July |
| 6-Aug | 15:00 | Consumer Credit | June |
Tags: home prices, MBS
