Both Pending and Existing Home Sales Beat Forecasts
U.S. home buyers signed more contracts to buy existing homes in March, as weather in much of the country warmed and as more listings came onto the market. An index of so-called “pending” home sales from the National Association of Realtors rose 3.4 percent from February, the first gain in nine months.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” Lawrence Yun, chief economist for the Realtors. “Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
In a separate report last week, The National Association of Realtors said on Tuesday Existing Home Sales came in at an annualized rate of 4.59 million units, the market forecasts were only expecting a reading of 4.55 million units.
So, we have two reports that show the housing market slowly moving forward despite higher home prices and tighter credit which is a good sign for the Spring season.
Mortgage backed securities (MBS) gained +61 basis points (BPS) from last Friday’s close which caused 30 year fixed mortgage rates to move lower from the prior week and almost erased the prior week’s -67BPS sell off. The market saw the lowest rates on Friday and the highest rates on Tuesday.
For the fifth straight week, we had domestic economic data that under normal circumstances would have caused MBS pricing to deteriorate. But it was all Russia, all the time on the networks and concern over tensions increasing in Ukraine/Russia had global investors seeking out the safety of U.S. bonds. This jump in demand for our bonds caused mortgage rates to decrease.
The following economic data certainly was better than expected and shows continued growth in the U.S.
|Existing Home Sales||4.55M||4.59M|
|Durable Goods Orders||2||2.6|
What to Watch Out For This Week:
Date Time (ET) Economic Release Actual Market Expects Prior 28-Apr 10:00 AM Pending Home Sales – 1.00% -0.80% 29-Apr 9:00 AM Case-Shiller 20-city Index – 13.00% 13.20% 29-Apr 10:00 AM Consumer Confidence – 83.6 82.3 30-Apr 7:00 AM MBA Mortgage Index – NA -3.30% 30-Apr 8:15 AM ADP Employment Change – 215K 191K 30-Apr 8:30 AM GDP-Adv. – 1.00% 2.60% 30-Apr 8:30 AM Chain Deflator-Adv. – 1.80% 1.60% 30-Apr 8:30 AM Employment Cost Index – 0.50% 0.50% 30-Apr 9:45 AM Chicago PMI – 56.5 55.9 30-Apr 10:30 AM Crude Inventories – NA 3.524M 30-Apr 2:00 PM FOMC Rate Decision – 0.25% 0.25% 1-May 7:30 AM Challenger Job Cuts – NA -30.20% 1-May 8:30 AM Initial Claims – 315K 329K 1-May 8:30 AM Continuing Claims – 2725K 2680K 1-May 8:30 AM Personal Income – 0.40% 0.30% 1-May 8:30 AM Personal Spending – 0.60% 0.30% 1-May 8:30 AM PCE Prices – Core – 0.20% 0.10% 1-May 10:00 AM ISM Index – 54.5 53.7 1-May 10:00 AM Construction Spending – 0.40% 0.10% 1-May 10:30 AM Natural Gas Inventories – NA 49 bcf 1-May 2:00 PM Auto Sales – NA 5.5M 1-May 2:00 PM Truck Sales – NA 7.6M 2-May 8:30 AM Nonfarm Payrolls – 210K 192K 2-May 8:30 AM Nonfarm Private Payrolls – 205K 192K 2-May 8:30 AM Unemployment Rate – 6.60% 6.70% 2-May 8:30 AM Hourly Earnings – 0.20% 0.00% 2-May 8:30 AM Average Workweek – 34.5 34.5 2-May 10:00 AM Factory Orders – 1.60% 1.60%
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.