In April, buyer demand was so strong that 56% of Existing Home Sales were on the market less than a month. But due to the current temporary economic contraction, sales posted the biggest monthly drop since 2010.
Housing Starts also took a big dip in April, the first full month of restrictions. But Building Permits beat starts by one of the highest figures since the 2008-09 recession, indicating increased builder interest ahead.
Freddie Mac notes that low mortgage rates are “giving potential buyers a good reason to continue shopping,” adding “we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.”
LAST WEEK IN REVIEW
LOOKING UP… The stock market headed up on the good news that the economies of all 50 states reopened, we had progress with vaccine trials, and the shutdown’s impact on corporate earnings should be short-lived.
Negatives included concerns over increased U.S.-China tensions and the now familiar spate of backward looking data quantifying the extent of the short-term damage done to the country’s economy.
More good news: initial unemployment claims have fallen seven weeks in a row, mortgage rates stay super-low, and chair Powell confirmed the Fed still has plenty of economy boosting ammunition.
The week ended with the Dow UP 3.3%, to 24,465; the S&P 500 UP 3.2%, to 2,955; and the Nasdaq UP 3.4%, to 9,325.
Even though stocks rose, bonds were fine. The UMBS 4.0% ended down just 0.22, to $106.42. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage fell, staying near its all-time low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… A new Zillow study found that about 75% of Americans now working from home want to continue if given the option. If that happened, two thirds say they would consider moving.
THIS WEEK’S FORECAST
HOME SALES MATCH A MIXED BAG OF REPORTS… There’s a drop in April New Home Sales forecast, but Pending Home Sales for existing homes should improve. Personal Income and Spending, PCE inflation, and Q1 GDP are predicted down, yet Consumer Confidence is expected to head back up.
U.S. stock and bond markets were closed yesterday, May 25, in observance of Memorial Day.
NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.