March Markets in a Minute
March 1, 2018
New Fed Chair Jerome Powell appeared for his first time in front of Congress this week. He moved markets with his upbeat economic views, pressuring rates.
Consumer prices increased in January, and inflation posted its largest gain in 12 months. Inflation pressures rates higher, including mortgage rates.
The labor market continues to show strength as well. Filings for unemployment benefits fell last week to the lowest level in almost five decades.
Home prices accelerated in December, according to a recent Case-Shiller report. Prices were up 6.4% year-over-year with continued strong buyer demand.
Pending home sales were down 4.7% in January. However, the drop is likely due to tight inventory and bad weather rather than increased mortgage rates.
Buyer traffic was strong in January, but listings fell to an all-time low, down 9.5% year-over-year. This can continue to fuel price gains.
March 8, 2018
President Trump’s proposed tariffs continue to spark talk of a trade war. this has caused uncertainty in markets, helping stabilize rates in the near term.
Although jobless claims last week came in higher than expected, the labor market remains strong, supporting a likely Fed policy rate increase this month.
The European Central Bank has shown confidence in the overseas economy and inflation. A strong global economy can pressure mortgage rates higher this year.
New home prices are likely to be pushed higher as builder costs increase. Lumber prices are up 25% over the same time last year.
Homebuyers are demanding more from their homes. A 2-car garage, granite countertops, and wald-in closet are now often cited as “essential” home features.
New tariffs on steel could drive up the cost of building apartment buildings and condos. Single-family homes, made of wood, are less likely to be affected.
March 15, 2018
Consumer inflation was less threatening in February according to the recent CPI data. If inflation rises too quickly, mortgage rates could follow.
Concerns over import tariffs and possible trade wars continue to plague markets and could cool the economy. This could help keep rates from rising.
The Fed is expected to raise policy rates at next week’s meeting. the change has already been priced into mortgage rates and likely won’t have further impact.
A recent survey shows Baby Boomers want high speed internet and to live near grocery stores and hospitals. Over 90% said they plan to stay in their own home.
Another poll found more than 70% of homeowners in their home for 10+ years aren’t moving because they like their home. Another 21% don’t want the hassle of a move.
The NAR found that 40% of potential millennial home buyers would start their property search online, while 15% said they would call an agent first.
March 22, 2018
As expected, the Fed raised policy rates at this week’s meeting. While they alluded to only two more hikes this year, rising inflation could necessitate more.
The institution of tariffs, most recently against China, can contribute to rising inflation by limiting free markets. Inflation fuels rising interest and mortgage rates.
After rising quickly early in the year, mortgage rates have stabilized. Nonetheless, further increases are expected through the rest of the year.
Existing home sales were up 3% in February, despite a chronic shortage of inventory. That’s 1.1% higher than February 2017, showing strong demand.
Tight inventory, especially for homes in the lower price ranges, is the new normal. Housing inventory was down 8.1% from a year ago this time.
Along with interest rates, rents have been rising. A recent survey concluded that the largest 250 U.S. cities saw rents grow year-over-year by an average of 2.7%.
March 29, 2018
Although a short week for markets, there was lots of economic data to digest. The week overall was positive for rates, helping to rebound from recent highs.
Consumer spending rose slightly for the second straght month in February. The PCE data suggests a moderation in inflation after prices pushed higher in January.
The labor market appears to be near full strength as jobless claims came in lower than expected. This is the 95th straight week claims were below 300,000.
New home sales were down in February but are trending up. Although down month-over-month, February’s numbers were 0.5% higher than a year ago.
Rates have stabilized, and loan applications increaed 4.8% last week. Purchase apps increased 3.1% week-over-week and were 8.2% higher than a year ago.
Pending home sales were up 3.1% in February, although down slightly from last year. Demand remains strong, but inventory levels continue to be an issue.
If you’re looking to purchase a home in the Dallas/Fort Worth area, please take a minute to explore our Dallas/Fort Worth mortgage options, or complete an online mortgage application to get pre-approved.
Rate movements and volatility are based on published; aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.
Markets in a Minute provided by Surefire CRM.
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