New Homes Continue to Heat Up
Two separate reports were released that showed continued growth in the New Home sector:
Home Builder’s Index:
Builder confidence in the market for newly built, single-family homes rose three points to 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for August, released today. This fourth consecutive monthly gain brings the index to its highest level in nearly eight years.
“Builder confidence continues to strengthen along with rising demand for a limited supply of new and existing homes in most local markets,” noted NAHB Chief Economist David Crowe.
Nationwide housing starts rose 5.9 percent to a seasonally adjusted annual rate of 896,000 units in July as multifamily construction rebounded from a dip in the previous month, according to newly released figures from HUD and the U.S. Census Bureau.
Regionally, combined housing starts activity posted solid gains of 40.2 percent in the Northeast, 25.4 percent in the Midwest and 7.2 percent in the West, respectively, in July, while the South posted a 7 percent decline.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -182 basis points from last Friday’s close which caused 30 year fixed rates to move upward. Mortgage rates hit their second highest level in 2013.
We had a very busy week with a large amount of economic data that was released. But most of the data including Retail Sales, PPI and CPI were all close to market expectations and didn’t really impact rates. But we did have a much better than expected Initial Weekly Jobless Claims report and that helped to pressure MBS (bad for rates). The preliminary reading for the Consumer Sentiment Index was much weaker than expected and normally would have helped rates, but the market was under too much pressure from two big factors.
And those two factors are: Strength in Europe and speculation that the Federal Reserve Bank would begin to decrease their monthly bond purchases in September. And those two factors are likely to be the major driving force in mortgage rates this week too.
|Date||ET||Economic Release||Actual||Market Expects||Prior|
|21-Aug||7:00 AM||MBA Mortgage Index||–||NA||-4.70%|
|21-Aug||10:00 AM||Existing Home Sales||–||5.20M||5.08M|
|21-Aug||10:30 AM||Crude Inventories||–||NA||-2.812M|
|21-Aug||2:00 PM||FOMC Minutes||–||–||–|
|22-Aug||8:30 AM||Initial Claims||–||337K||320K|
|22-Aug||8:30 AM||Continuing Claims||–||2959K||2969K|
|22-Aug||9:00 AM||FHFA Housing Price Index||–||NA||0.70%|
|22-Aug||10:00 AM||Leading Indicators||–||0.50%||0.00%|
|22-Aug||10:30 AM||Natural Gas Inventories||–||NA||65 bcf|
|23-Aug||10:00 AM||New Home Sales||–||490K||497K|
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.