Think record high home prices are a thing of the past?
Then think again.
Across America, the housing market has recovered since the crash of 2009. However, in six states, according to CoreLogic, the market isn’t just healthy—it’s also setting new price records, even surpassing the peak set in 2006.
According to the CoreLogic Home Price Index, which tracks the resale activity of thousands of homes across the country, the following six states created new index highs.
- Colorado: 9.8%
- New York: 8.2%
- North Dakota: 7.7%
- Texas: 8.5%
- Wyoming: 8.4%
- Oklahoma: 5.2%
Most of those states have benefited from the domestic energy boom, while New York has been lifted by the growing economy in general.
“This price appreciation has real fundamentals behind it,” said Jonathan Smoke, chief economist for realtor.com®. “This isn’t speculation driven by loose credit. It’s people with rising incomes driving it. This is the good kind of price appreciation.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -27 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move slightly higher from the prior the week.
Our benchmark FNMA 3.0 April coupon traded in a very narrow range, the difference between our highest price (lowest rate) and lowest price (highest rate) was only 55 basis points which is extremely “thin” for an entire week of trading. MBS had plenty of support due to strong technical moving averages just below the week’s trading levels and also saw strong support due to continued concern over the potential Greek exit from the Euro.
It was a very light week for economic data. We received some very good readings with ISM Non-Manufacturing (2/3 of our economy) with a reading of 56.5, and some growth with Wholesale Inventories (+0.3%) as well.
The two biggest events of the week were the release of the minutes from the last FOMC meeting and our 30 year Treasury auction. Probably, the biggest mover of the week was the 30 year Treasury auction which saw a pull back in demand as measured by the bid-to-cover ratio and as a direct result, we hit our worst intra-levels of the week.
FOMC Minutes: This was a mixed bag and quite frankly if you were a bear…you found what you were looking for in these minutes. But if you were a bull….well, you still found what you were looking for in these minutes. Essentially, the minutes made it clear that the Fed is still data dependent and that voting members had some very different opinions (and opinion is the key word) on when the Fed should tighten…but all the various and sundry Fed President’s and Governors have been “chatty Cathies” with speeches galore making their opinions known to the market place. So..really there was nothing really new in this. Federal Reserve members found themselves at a crossroads during their pivotal March meeting, torn between hiking rates in June, September—or even waiting until 2016, according to meeting minutes.
They also expressed concerns over:
– The Dollar’s drag on exports and growth
– Most saw risk to the outlook and job market fairly balanced
– Cited low oil prices
What to Watch Out For This Week:
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|14-Apr||8:30 AM||Retail Sales||–||-0.60%|
|14-Apr||8:30 AM||Retail Sales ex-auto||–||-0.10%|
|14-Apr||8:30 AM||Core PPI||–||-0.50%|
|14-Apr||10:00 AM||Business Inventories||–||0.00%|
|15-Apr||7:00 AM||MBA Mortgage Index||–||NA|
|15-Apr||8:30 AM||Empire Manufacturing||–||6.9|
|15-Apr||9:15 AM||Industrial Production||–||0.10%|
|15-Apr||9:15 AM||Capacity Utilization||–||78.90%|
|15-Apr||10:00 AM||NAHB Housing Market Index||–||53|
|15-Apr||10:30 AM||Crude Inventories||–||NA|
|15-Apr||2:00 PM||Fed’s Beige Book||–||–|
|15-Apr||4:00 PM||Net Long-Term TIC Flows||–||-$27.2B|
|16-Apr||8:30 AM||Initial Claims||–||NA|
|16-Apr||8:30 AM||Continuing Claims||–||NA|
|16-Apr||8:30 AM||Housing Starts||–||897K|
|16-Apr||8:30 AM||Building Permits||–||1092K|
|16-Apr||10:00 AM||Philadelphia Fed||–||5|
|16-Apr||10:30 AM||Natural Gas Inventories||–||NA|
|17-Apr||8:30 AM||Core CPI||–||0.20%|
|17-Apr||10:00 AM||Mich Sentiment||–||93|
|17-Apr||10:00 AM||Leading Indicators||–||0.20%|
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.The above 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.