Low inventories of affordable homes for sale on the market impacted lower sales in December. The National Association of REALTORS® reports that Pending Home Sales fell nearly 5% in December from November. Each of the nation's four major regions suffered losses. Sales were up 4.6% compared to last year. “The state of housing in 2020 will depend on whether home builders bring more affordable homes to the market,” said Lawrence Yun, NAR's chief economist. “Home prices and even rents are increasing too rapidly, and more inventory would help correct the problem and slow price gains.”
Mortgage rates continued to hover just above all-time lows in the latest week, reports the Mortgage Bankers Association (MBA). Fears of the coronavirus outbreak sent a chill throughout global stock markets while investors rushed into the safe haven of the bond markets. The 30-year fixed-rate mortgage fell by six basis points to 3.81 with 0.28 in points in the week ending January 24, 2020. The MBA's Market Composite Index, a measure of total mortgage loan application volume rose 7.2%, the Purchase Index increased 5.4% while the Refinance Index was up 7.5%.
It's Fed day! The Federal Reserve will release its monetary policy statement at 2:00 p.m. ET this afternoon where there is no chance of a change in the short-term Fed Funds Rate. The Fed will most likely reiterate that the economy is in a good place right now and monetary policy will be on a wait-and-see stance while inflation remains low. The Fed may talk of balance sheet tuning and how to scale back on its $60B in Treasury purchases each month. Fed Chair Powell will hold a press conference immediately following the release at 2:30 p.m. ET.
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