Posts tagged Existing Home Sales
What’s Ahead For Mortgage Rates This Week : July 26, 2010
Jul 26th
Mortgage markets worsened last week for the first time in 6 weeks last week. Investors were pleased with corporate earnings reports and the European bank stress tests results. Stocks gained on the news, and bonds lost.
Mortgage rates rose last week, but only slightly. Rate are still hovering near their lowest levels of all-time.
Of the bigger stories last week was Existing Home Sales. As reported by the National Association of Realtors®, sales volume was down in June and home supplies were up. But figures were a bit better than expected, giving some hope for housing.
Notably, the number of move-up buyers outnumbers first-timers and the national median home price rose, suggesting that mid-to-upper home prices are getting some support.
This week, the market gets additional two pieces of housing data to add to the mix:
- New Homes Sales (Monday)
- Case-Shiller Index (Tuesday)
Both will have an impact on mortgage rates. In general, better-than-expected data should cause rates to rise in Carolinas ; worse-than-expected data should cause rates to fall.
Also this week, there’s two consumer confidence reports, the Fed’s Beige Book, and late-in-the-week inflationary data. Mortgage markets should remain volatile with so much news headed down the pipe.
It’s too soon to declare the current 3-month rally over, but it’s been 3 weeks since rates dipped. This can be a signal that mortgage rates have finally bottomed and that it’s time to lock your rate.
If you’re floating a mortgage rate, or thinking about a refinance, it’s time to get locked in. Rates may drop this week, but then again, maybe they won’t. There’s little sense gambling on a bet as big as a mortgage.
The Supply Of New Homes For Sale Just Dropped Off A Cliff
May 28th
The supply of newly-built homes for sales plummeted in April, a positive indicator for the Charlotte housing market as we head into the summer months.
It’s no wonder that homebuilders are breaking new ground at the fastest clip in 2 years.
At the current sales pace, the nation’s complete supply of new homes would be sold in just 5 month’s time. That’s more than double the pace of a year ago.
Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.
It’s a similar spike as within the Existing Home Sales data released earlier this week.
But before we declare the housing market “repaired in full”, we have to consider a few of the reasons why home sales are charting so strongly.
The first reason is the federal homebuyer tax credit’s April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.
The second reason is that mortgage rates have remained exceptionally low, defying expert predictions. Low rates don’t sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.
And, lastly, March and April’s new home sales may have been buoyed by aggressive discounting on behalf of homebuilders. As compared to February 2010, April’s average new home sale price was lower by 13 percent. That’s a sharp drop in a short period of time.
For now, though, homes are selling, supplies are dropping, and buyer interest is high. It’s no wonder builder confidence is soaring.
