Home Prices increase for Seven Straight Months
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.5 percent on a seasonally adjusted basis, in line with economists’ forecasts. On a non-seasonally adjusted basis, prices fared better, gaining 0.9 percent. Prices in the 20 cities climbed 2 percent year-over-year, topping expectations for a 1.9 percent increase.
It was the seventh straight month of increases, extending the longest continuous string of gains since prices were boosted by the homebuyer tax credit in 2009 and 2010.
The sustained good news in home prices “makes us optimistic for continued recovery in the housing market,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.
“Even as we end the seasonally strong home buying period, the statistics are positive,” said Blitzer.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +18 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move slightly lower. We had our highest mortgage rates on Friday morning and our lowest rates on Wednesday.
The financial markets were closed Monday and Tuesday due to Hurricane Sandy. When they reopened on Wednesday, bonds still saw lighter than normal volume as not all trading systems were at 100 percent.
The U.S. economy made some more positive strides last week as the ISM Manufacturing Index, Case-Shiller Home Price Index, ADP Private Payrolls, Factory Orders and Non-Farm Payrolls were all better than the market expectations. Normally, this type of positive economic data would have pressured MBS pricing and increased mortgage rates but concern over the looming “fiscal cliff” that is quickly approaching and the uncertainty on how it will impact all the markets helped to offset last week’s positive economic news.
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||Economic Release||Actual||Market Expects||Prior|
|5-Nov||10:00 AM||ISM Services||54.2||55||55.1|
|7-Nov||7:00 AM||MBA Mortgage Index||–||NA||-4.80%|
|7-Nov||10:30 AM||Crude Inventories||–||NA||-2.045M|
|7-Nov||3:00 PM||Consumer Credit||–||$10.6B||$18.1B|
|8-Nov||8:30 AM||Initial Claims||–||370K||363K|
|8-Nov||8:30 AM||Continuing Claims||–||3250K||3263K|
|8-Nov||8:30 AM||Trade Balance||–||-$45.4B||-$44.2B|
|9-Nov||8:30 AM||Export Prices ex-ag.||–||NA||0.70%|
|9-Nov||8:30 AM||Import Prices ex-oil||–||NA||0.20%|
|9-Nov||9:55 AM||Mich Sentiment||–||83||82.6|
|9-Nov||10:00 AM||Wholesale Inventories||–||0.40%||0.50%|
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.