Pending Home Sales Rise 8.4%
The National Association of Realtors reported that their index of Pending Home Sales rose 8.4% from February 2012 and was constrained only by the lack of inventory available for sale.
Thinking about buying a home in 2013? This is not the same market where you can take your time and view many different homes. Home prices are moving up and the number of available homes for sale that are in good condition are moving fast.
Lawrence Yun, NAR chief economist, said limited inventory is holding back the market in many areas. “Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels,” he said. “Most local home builders are small businesses and simply don’t have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market.”U.S. home resales (the largest segment of the housing market) hit a three-year high in February and prices jumped, adding to signs of an acceleration in the housing market recovery.
More good news: Yun projects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity and the national median existing-home price is forecast to rise nearly 7 percent this year, while mortgage interest rates should remain historically low, but trend up slowly.
So, the industry experts are saying: 1) Good quality Inventory is moving fast and at 2) higher prices and 3) with mortgage rates rising throughout the year. What does this tell you?
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained 34 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move to slightly lower. We traded in a fairly narrow range and had our highest mortgage rates on Monday morning and our lowest rates on Wednesday.
We had a mixed bag of economic news last week. On the plus side, Durable Goods Orders, New Home Sales, Pending Home Sales and Consumer Sentiment were all very strong. But on the negative side we saw weakness in Initial Jobless Claims, Consumer Confidence and Chicago PMI. This caused MBS to trade in a very well defined trading channel. This channel was capped by our 50 day moving average and supported by our 10 and 25 day moving averages.
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|
|1-Apr||10:00 AM||ISM Index||–||54||54.2|
|1-Apr||10:00 AM||Construction Spending||–||0.90%||-2.10%|
|2-Apr||10:00 AM||Factory Orders||–||2.50%||-2.00%|
|2-Apr||2:00 PM||Auto Sales||–||NA||5.5M|
|2-Apr||2:00 PM||Truck Sales||–||NA||6.7M|
|3-Apr||7:00 AM||MBA Mortgage Index||–||NA||NA|
|3-Apr||8:15 AM||ADP Employment Change||–||197K||198K|
|3-Apr||10:00 AM||ISM Services||–||55.3||56|
|3-Apr||10:30 AM||Crude Inventories||–||NA||3.256M|
|4-Apr||7:30 AM||Challenger Job Cuts||–||NA||7.00%|
|4-Apr||8:30 AM||Initial Claims||–||343K||357K|
|4-Apr||8:30 AM||Continuing Claims||–||3045K||3050K|
|4-Apr||10:30 AM||Natural Gas Inventories||–||NA||-95 bcf|
|5-Apr||8:30 AM||Nonfarm Payrolls||–||178K||236K|
|5-Apr||8:30 AM||Nonfarm Private Payrolls||–||198K||246K|
|5-Apr||8:30 AM||Unemployment Rate||–||7.70%||7.70%|
|5-Apr||8:30 AM||Hourly Earnings||–||0.20%||0.20%|
|5-Apr||8:30 AM||Average Workweek||–||34.5||34.5|
|5-Apr||8:30 AM||Trade Balance||–||-$44.6B||-$44.4B|
|5-Apr||3:00 PM||Consumer Credit||–||$12.9B||$16.2B|
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.