Sales of new single-family homes rose in December from November on the notion that with higher rates forecasted in 2022, potential homebuyers were out ahead of the possible increase in borrowing costs. New Home Sales rose 12% in December from November to an annual rate of 811,000 versus 760,000 expected but fell 14% from a year ago. New Home Sales totaled 762,000 last year, down from 822,000 in 2020. Across the nation, sales fell 15.6% in the Northeast, rose 57% in the Midwest, up 15% in the South and were unchanged in the West. The median sales price fell to $377,700 in December from the 12-month high of $421,500 in October. The average sales price was $457,300. Inventories of new homes were in a normal range of six months.
Home borrowing costs jumped in the latest week to levels not seen since March 2020. The MBA reports that the 30-year fixed-rate mortgage rose by eight basis points to 3.74% with 0.43 in points for the week ending January 21, 2022. Within the report it showed that the Market Composite Index fell 7.1%, the Purchase Index declined 2% while the Refinance Index dropped 13%. An MBA spokesperson said, "After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them."
It's Fed day! The Fed meeting concludes this afternoon at 2:00 p.m. ET with the release of the monetary policy statement and Fed Chair Powell's press conference at 2:30. Will the Fed walk back some of the recent hawkish tone? Stocks have been under pressure, yields have increased, Consumer Sentiment remains at 10-year lows while U.S. economic growth is decelerating in 2022. Is this an environment for 5-6 rate hikes or 4 or 5? The U.S. markets could get some answers this afternoon.
New Home Sales jump. Home borrowing costs continue to rise. Fed statement due out this afternoon.
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