POST TAGSMarket Updates
Blog posted On January 23, 2023
Mortgage rates trended slightly higher last week but will likely rebalance this week with upcoming news on inflation, consumer spending, and personal income. Last week also brought us December’s existing home sales report, which was better than expected.
Existing home sales slipped 1.5% month-over-month in December, which was much better than the expected decline of 5.4%. Because existing sales measure the closed sales in December, it’s likely that they were pending sales in October. The mortgage rates in October were brushing some of the highest levels in decades. As a result, experts predicted contract signings would be much lower that month and would lead to lower closed sales in December. But they weren’t. This could, in part, be due to the decline in home prices. In December’s existing home sales report, the median home price declined 1% month-over-month. Other good news from this report includes the increased number of first-time home buyers that were able to purchase in December.
This week, there are a couple other housing reports coming out, including new home sales and pending home sales. Though new home sales climbed 5.8% month-over-month in November, they are projected to fall 4.7% in December. Pending home sales fell 4% month-over-month in November but are expected to level off in December with a 0.9% decrease.
Arguably one of the most important mortgage-rate-related reports coming up this week is the personal consumption expenditures (PCE) index, which is the Federal Reserve’s preferred method of measuring inflation. Cooler inflation reports have been key to lower rates over the past couple of months, so the market is hoping the PCE index for December keeps up the good news. In November, the PCE index climbed just 0.1% month-over-month and 5.5% year-over-year, while the core index climbed 0.2% monthly and 4.7% annually. That core annual inflation number is expected to fall to 4.4%. Two other key reports are personal income, projected to slow to 0.2% and consumer spending, expected to slip 0.1%.
As always, if you have any questions about the market movement or upcoming reports, let us know!
Sources: Bloomberg, Mortgage News Daily