Housing Data Mixed; Mortgages Still Hard to Get
The housing markets is showing signs of picking up as the spring turns to summer, but forward looking reports such as the mortgage market index, has been relatively subdued, which does not bode well for future housing plays.
The U.S. MBA mortgage market index fell 1.0% in data released earlier on Wednesday, along with a 1.2% drop in the purchase index and a 0.9% dip in the refinancing index for the week ended June-20. The rather subdued declines came even with another drop in mortgage rates, as the 30-year fixed rate slipped three basis points to 4.33%.
Last week’s FOMC statement was not as hawkish as feared following the build-up from UK Carney’s rate hike hints and hot inflation data, with Yellen dismissing these as “noisy.” So far this week there have been rather mixed results on May housing stats, though showing some signs of a continued recovery from the deep winter freeze. To recap, on Monday existing home sales rose 4.9% and Tuesday’s new home sales leapt 18.6% to the highest level since 2008 thanks a 54.5% gain in the Northeast and 34.0% surge in the West.
U.S. new home sales surged 18.6% to a 504k annual rate in May versus 425k in April. March’s 407k reading was revised up to 410k. The result is the highest reading since May 2008. Sales were up in all four regions, with strength mostly from the West and Northeast. The months’ supply of homes dropped to 4.5 from 5.3. There were 189k homes on the market, the same as in April. The median sales price rose 4.6% to $282,000 in May from $269,700, which was revised down from $275,800. This was up 6.9% y/y versus -3.4% previously.
For housing to continue to move forward, the demand for mortgages will need to pick up. Banks will need to extend more efficient loans to consumers, which means credit will need to ease. Housing in hard hit places like Florida continues to be soft, while the North East remains robust.
Sorry. No data so far.