POST TAGSMarket Updates
Blog posted On January 23, 2024
Rates trended higher last week, thanks to some comments from Fed members and stronger economic reports. Retail sales came in hot in December, which suggests higher consumer spending, pushes inflation higher, and generally makes rates trend higher. Additionally, Fed member Waller made comments that had a negative impact on the bond market and rates. Despite a week of mostly bad news, there were still some silver linings.
The National Association of Home Builders (NAHB) housing market index surged to a level of 44 in December. The expected level was 39. The index outperformed on all three of its components: single family sales: present; single family sales: next six months; and traffic of prospective buyers. This is a good sign for the spring housing market.
Building permits were at a level of 1,495,000 in December, a 1.9% increase from the month before.
“At the very least, the housing market is showing signs that it's receptive to the recent improvement in rates,” wrote Matthew Graham of Mortgage News Daily. “This is best seen in more timely data series like mortgage applications, where both refi and purchase apps moved back up this week.” He’s referring to the 10.4% increase in mortgage application submissions during the week ending 1/12. The Refinance Index increased 11% from the previous week and was 10% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 9% from one week ago.
Though they’ve been making minor corrections, rates are still trending below the highs in October. The corrections “[have] been gentle so far, especially considering that we haven't seen any economic data that makes a strong case for additional gains,” noted Graham.
The future of rates still depends on the trajectory of key economic data such as jobs and inflation. Stay tuned for more updates!
Sources: Mortgage News Daily