The National Association of REALTORS® reports that Pending Home Sales unexpectedly declined in October by 2.6% from September, well below the gain of 0.5% expected. On an annual basis, sales fell 6.7%, the seventh straight month of annual decreases. Sales declined in the South, Midwest and the West with gains seen in the Northeast. Lawrence Yun, NAR chief economist, said that ten straight months of decline certainly isn’t favorable news for the housing sector. “The recent rise in mortgage rates have reduced the pool of eligible homebuyers,” he said.
Mortgage rates were unchanged this week and have stabilized in the past couple of months as interest rate sensitive sectors such as new auto and home sales softened the outlook for the economy. Freddie Mac reports that the 30-year fixed-rate mortgage remained at 4.81% with an average 0.5 in points and fees. Freddie Mac went on to say, "Homebuyers pounced on the stability in rates as purchase mortgage applications increased, which indicates that despite higher mortgage rates this year there are buyers on the fence waiting for the right time to buy."
Fed Chair Jerome Powell spoke at the New York Economic Club yesterday and he delivered a somewhat dovish stance on future interest hikes. Mr. Powell said that the benchmark Fed Funds Rate is just below its neutral policy and that future interest rate moves will be data dependent. Mr. Powell went on to say that he doesn’t see any dangerous excesses in the Stock markets while inflation remains contained. The Fed is expected to raise the benchmark interest next month but there may only be one hike in 2019, down from three that was previously expected.
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