STRONG DATA: Courtesy the Loan Ladies at Prospect Mortgage
Upside surprises in economic activity are usually not good for mortgage rates. The major reports released over the past week, especially the housing market data, far exceeded expectations. Hawkish comments from Fed Chair Janet Yellen in a speech on Friday afternoon also had the potential to push mortgage rates higher. Despite the strong data and hawkish comments from Fed officials, mortgage ratesd ended the week with little change.
Two important reports on the housing market released over the past week showed that activity in April rose to the best level in years. First, a report that measures the number of contracts signed to buy newly built homes showed that activity in April rose to the best level since january 2008. This was good, but new homes represent only 10% of the overall housing market. The remaining 90% is made up of activity involving previously owned homes. The data on previously owned homes also showed stunning results in April. Contracts signed in April to buy previously owned homes jumped to the highest level since February 2006.
The other significant data released this week that exceeded expectations was report that measured activity regarding orders for durable goods. Durable goods include items considered to be useful for at least three years, like planes, autos and machinery. Orders for durable goods rose in April by 3.4%. Most of the increase came from orders for civilian aircraft, which generally are quite large and can be very volatile--even excluding transportation, new orders rose .4% from March. For more information on how the latest economic activity effects your ability to buy or sell a home, contact FRITZ.
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