Daily Rate Update: March 25th-29th

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Friday – March 29, 2019

Good news was reported this morning in the housing sector as the spring buying gets underway. Sales of new single-family houses rose nearly 5% in February from January recording the largest monthly gain in 11 months. The Census Bureau reports that New Home Sales came in at an annual rate of 667,000 in February versus the 618,000 expected. Sales were marginally higher year-over-year by 0.6%. Across the country, big gains were seen in the Northeast and Midwest with a slight gain in the South while the West saw flat sales. The average sales price was $379,600 with inventories were at a 6.1 month supply.

Inflation remained subdued in February as demand for goods and services eased a bit with somewhat slowing growth. The Federal Reserves favorite inflation gauge, the Core Personal Consumption Expenditure (PCE), fell to 1.8% year-over-year in January from the 2% recorded in December. The Fed has a target rate of 2%. If inflation remains low, the Fed will be on hold for any rate hikes in 2019 and could even cut in the fall.

Courtesy of Mortgage Market Guide

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Thursday – March 28, 2019

Low inflation levels coupled with slowing global economic growth continued to push mortgage rates lower in the latest survey to lows seen in mid-January 2018. Freddie Mac reports that the 30-year fixed-rate mortgage fell 22 basis points to 4.06% with an average 0.50 in points and fees. It was the largest one-week decline in a decade. Freddie Mac says low rates and a strong job market will be great for housing demand now that the spring buying season is underway.

The final read on Q4 2018 Gross Domestic Product was released with a slight decline to 2.2% from the previous reading of 2.6% leaving full year growth at a solid 2.9%. Inflation data within the numbers were tame while consumer spending slipped a bit. The first quarter of 2019 GDP could come in lower, given the government shutdown and historically being the weakest quarter of the year. Weekly Initial Jobless Claims came in at 211K, lows seen in the late 1960s as the labor market continues its winning ways.

Americans filing for first time unemployment benefits fell to lows seen in the late 1960’s in the latest week. The Labor Department reports that Weekly Initial Jobless Claims fell by 5,000 in the latest week to 211,000. The four-week moving average of claims, which irons out seasonal abnormalities, fell 3,250 to 217,250. The March Jobs Report will be released next week and comes after a weak Non-Farm Payrolls for February.

Courtesy of Mortgage Market Guide

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Wednesday – March 27, 2019

Home borrowing and refinance costs continued to decline in the latest week due in part to fears of slowing global growth along with a low inflation environment. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage fell ten basis points in the latest week to 4.45% with points declining to 0.39. The 30-year jumbo rate fell to 4.35% from 4.37% with similar points. The beginning of the spring buying season saw purchase applications jump 6% while the Refinance Index surged 12%.

The FHFA reports that home prices rose 0.6% in January 2019 from December 2018. The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. On a year-over-year basis, prices rose 5.6% from January 2018 to January 2019. Home price gains have been declining annually to more normal levels.

The National Association of REALTORS® (NAR) reports that more Americans believe that now is a good time to purchase a home. Of those surveyed, 37% said it is a good to purchase a home, up from 34% in the final quarter of 2018. In addition, 53% polled said that the economy is still improving, though below 59% at the end of 2018. NAR’s chief economist Lawrence Yun says several factors are helping to improve the attitudes of potential homebuyers. “First, inventory has been rising, so those buyers interested in making a purchase will not be limited in choices. Additionally, more stable home price trends are leading to more foot traffic at various open house gatherings.”

Courtesy of Mortgage Market Guide

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Tuesday – March 26, 2019

The Commerce Department reports that Housing Starts fell 8.7% month-over-month in February from January to an annual rate of 1.162 million units versus the 1.210 million expected. Starts were down 9.9% year-over-year. It was the largest monthly percentage decline for total Housing Starts in eight months. Single-family starts plunged 17% month-over-month, down 10.6% annually. Multi-family dwellings jumped 23.5% monthly, but fell 5.4% annually. Total Housing Starts fell in the Northeast, South and West, with gains seen in the Midwest.

A recent study conducted by Credit Suisse says that real estate agents are reporting the current housing market environment is leaning towards buyers. Real estate agents are saying that many of their home buyers are motivated with more supply of homes on market along with along with declining mortgage rates. However, for buyers looking for homes priced in the $200,000 to $300,000 levels, there is a lack of supply in that category.

Courtesy of Mortgage Market Guide

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Monday – March 25, 2019

Rental prices edged higher in February from January and are up 3.6% annually last month, up $2 to $1,426. The 3.6% annual gain is the largest increase since late 2016, according to the latest Yardi Matrix National Multifamily Report. The data showed that demand for rentals continues to grow, which covers 127 major U.S. real estate markets. The report cited low unemployment along with growing wage growth for the continued increase in rents.

U.S. stocks begin the week modestly higher as the markets look for some type of trade deal this week. U.S. trade officials will travel to Beijing on Thursday to meet with Chinese officials. Global growth fears have capped any gains for the equity markets in the past month though here in the U.S. unemployment remains low, consumer confidence is just below all-time highs while growth here in the U.S. continues to remain solid.

Inflation has been tame for quite some time now as the Federal Reserve expects it to remain low through 2021. The Fed’s favorite inflation gauge, the Core Personal Consumption Expenditures (PCE), will be released at the end of the week. The current data saw the Core PCE at 1.9%, just below the Fed’s target range of 2%. The Core PCE is a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy.

Courtesy of Mortgage Market Guide

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