Existing Home Sales Jump
|Existing home sales increased strongly in February, experiencing the largest month-over-month gain since December 2015, according to the National Association of Realtors®. Three of the four major U.S. regions saw sales gains, while the Northeast remained unchanged from last month.
Total existing home sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops. Total sales shot up 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February.
Lawrence Yun, NAR’s chief economist, credited a number of aspects to the jump in February sales. “A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound.”
The median existing-home price for all housing types in February was $249,500, up 3.6 percent from February 2018 ($240,800). February’s price increase marks the 84th straight month of year-over-year gains.
Total housing inventory at the end of February increased to 1.63 million, up from 1.59 million existing homes available for sale in January, a 3.2 percent increase from 1.58 million a year ago. Unsold inventory is at a 3.5-month supply at the current sales pace, down from 3.9 months in January but up from 3.4 months in February 2018.
Properties remained on the market for an average of 44 days in February, down from 49 days in January but up from 37 days a year ago. Forty-one percent of homes sold in February were on the market for less than a month.
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.00 MBS) gained +50 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move lower compared to the previous week.
Overview: Mortgage rates dropped to their lowest levels due to three main factors: Weak manufacturing data out of Asia and Europe, a very “dovish” Federal Reserve on Wednesday, and the continued train wreck that is Brexit. The weak economic data and geo-political instability had money flowing into the safe-haven of our U.S. bonds.
The Talking Fed: As expected, they kept their key interest rate unchanged. However, they certainly had a more “dovish” tilt to their outlook compared to their last projections in December.
Taking it to the House: A block-buster Existing Home Sales Report for February with one of the largest monthly gains on record. 5.510M annualized units beat out estimates of 5.10M and represents a 11.2% MOM gain. The March NAHB Housing Market Index remained at 62, the market was expecting 63. Any reading above 50 is positive and above 60 is very strong.
|What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.