Wednesday – January 26, 2022
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 and 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.
Courtesy of Mortgage Market Guide
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Tuesday – January 25, 2022
The November S&P Case-Shiller 20-City Home Price Index was up 18.3% annually from 18.5% in October and was up 1% monthly from October. The National Index rose 18.8% annually from 19%, up 0.9% monthly. A spokesperson said that we should soon begin to see the impact of increasing mortgage rates on home prices. Craig Lazara from Case-Shiller said, “We continue to see very strong growth at the city level. All 20 cities saw price increases in the year ended November 2021, and prices in 19 cities are at their all-time highs. November’s price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 16 of them.”
Consumer Confidence slipped in January from December after three straight monthly gains at the end of 2021. The Conference Board’s Consumer Confidence Index fell to 113.8 from 115.2 In December. Consumers’ appraisal of current business conditions was more favorable in January while consumers’ assessment of the labor market was mixed. The Consumer Confidence Index reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.
The MBA reports that mortgage applications for new home purchases in December 2021 declined 7.1% from December 2020. On a monthly basis, applications fell 5% from November in its Builder Application Survey. The MBA’s Builder Application Survey tracks application volume from mortgage subsidiaries of home builders across the country. “Applications to buy a new home slowed in December, while the activity remained tilted to higher-priced homes,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Supply chain challenges, labor shortages, and higher materials costs also contributed to last month’s decline, as projects were delayed or cost more to complete. The average loan size set another survey record at $423,102, as these higher building costs are pushing sales prices higher.”
Courtesy of Mortgage Market Guide
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