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Disclaimer: My goal is to ensure that the Realtor community is kept abreast of current market analysis. While I haven't received any complaints, the news is not always positive towards our industry. Rates are still near historic lows, so I always emphasize that with clients and hope that you do as well.
This week was full of economic news and releases of key data during the week. Most notably, the Fed's auction of Treasuries seemed to have great bearing on the mortgage market this week with rates rising modestly during all auctions. Below is a synopsis of this week's most notable news releases:
Tuesday/ The NAR released Existing Home Sales for February which showed a decline of 0.6% over January after they reported sales of 5.02 million sales on an annualized basis. Distressed sales made up 35% of the sales total vs 38% in January. The West and South still remain weak while the Midwest and Northeast showed strength in February.
Wednesday / Durable Goods Orders continued to show a gain although it improved only 0.5%- more important was a revision to January's numbers showing a 3.9% gain. The manufacturing area continues to be a bright spot in our economy for the time being. New Home Sales continued to show weakness with a drop of 2.2% for February. Housing overall continues to drag on the economy with issues over employment and high government deficit spending.
Thursday / Initial Jobless Claims fell to a lower than expected 442,000 for the week ending March 20th.
Friday / GDP rose in the 4th quarter but not as much as expected ending at 5.6% vs expectations of 5.9% on an annualized basis. The Reuters/University of Michigan Consumer Sentiment Index edged just slightly higher with a reading of 73.6
While most of the week showed very slight improvements other than housing, most of the week's rate volatility followed less than expected demand at the Treasury Auctions this week by the Fed. What transpired was a fundamental weakness in Bonds with Yields rocketing higher in order to attract investors. With the Feds upcoming exit from the Mortgage Backed Securities Market next week, traders are beginning to believe that mortgage rates will more closely follow the Treasuries. Since the housing market is still very weak, many think that the Fed may have to extend or re-enter the Mortgage Backed Securities Market to prevent rates from escalating too high in the months ahead which would slow housing even further. That said, we still have rates near historic lows which is important to convey to our clients.
Rates Below are Today's Close for 30 Day Locks
Conforming 30 Yr Fixed ended at 4.75% with an APR of 4.919%
Conforming Jumbo 30 Year Fixed ended at 4.875% with an APR of 5.043%
Today's slight rebound in the Bond market helped to reduced this weeks rise in rates with rates edging up 1/8th from last week for conforming fixed. Recommendation for those of you who have client's closing within the next 30 days is to strongly encourage locking. Market sentiment with the Fed's MBS exit is for rates to jump possibly by 0.25% to 0.5% in the coming weeks.
Next Week's Economic Calendar Includes:
Monday / Personal Income
Tuesday / Consumer Confidence
Wednesday / ADP Employment, Chicago PMI ( Purhase Managers Index ), and Factory Orders
Thursday / Motor Vehicle Sales, Jobless Claims, Construction Spending
Friday / Good Friday only has the Employment Situation Consensus
Have a great weekend selling, and in CA if you need assistance please call me direct at 858-997-6300.
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