The Mortgage Bankers Association pegged purchase applications up for the eighth straight week, coming in 13% higher than a year ago, noting “the recovery in the purchase market continues to gain steam.”
On a deep dive since March, Fannie Mae’s Home Purchase Sentiment Index finally turned higher in May, indicating consumer views are improving as the economy begins to show signs of recovery from the coronavirus crisis.
A Zillow statement said, “New for-sale listings are up 19.3% month over month” and “newly pending sales up 24.5% over the past month,” plus “traffic to for-sale listings…is up 51% from a year ago.”
REVIEW OF LAST WEEK
SELLING SPREE… After recent gains, stocks sank steeply for the week. This was blamed on the Fed’s cautious outlook (nothing new), and the coronavirus (previously ignored), so the real reason was plain old profit-taking.
The big outcome of the Fed meet was no rate hike expected till at least 2023. As chair Powell put it, “We’re not even thinking about thinking about raising rates.” They’ll also keep buying bonds, so mortgage rates should stay low too.
The Fed may be cautious, but initial jobless claims fell for the tenth straight week and 2.5 million jobs came back in May, suggesting the economy bottomed then, making the COVID recession, though sharp, the shortest on record.
The week ended with the Dow down 5.6%, to 25,606; the S&P 500 down 4.8%, to 3,041; and the Nasdaq down 2.3%, to 9,589.
Profit-taking in stocks sent traders over to bonds. The UMBS 3.5% ended UP 0.11, at $105.47. The national average 30-year fixed mortgage rate barely rose in Freddie Mac’s weekly Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… The number of single family home and condo flips in Q1 hit its highest level in 14 years. Gross profits gained too, although the return on investment slipped to 36.7%, still decent, but a nine-year low.
THIS WEEK’S FORECAST
HOME BUILDING, RETAIL SALES SPIKE UP… The forecasts say May Housing Starts will be back up to a 1.1 million annual rate, Building Permits, more than 1.2 million. Analysts also expect Retail Sales to rebound, up 9.0% in May following their 16.4% April decline.
NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.
