We will continue to float, not lock Mortgage Rates, into the weekend, but very carefully as the Bond is near the higher end of the recent short term trading range. The technicals show some indecision after the recent rally.
Bonds rose by 12bp to end the week at 104.53 up 62bp for the week. The Dow fell by 140.19 points to 16,361.46, the S&P 500 lost 15.21 points to finish at 1,863.40, while the tech heavy Nasdaq fell by 72.77 points to end the week at 4,075.56. Oil was last seen at $100.61/barrel down $1.34 and down from $104.30 from the close on April 17. Next week’s economic calendar is packed full of a broad array of reports that will touch on key segments of the U.S. economy capped off by next Friday’s April Employment Report. April Non-farms expected at 210K.
Weekly Survey of Rates from the Mortgage Bankers Association –Wednesday April 23rd
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.49 percent from 4.47 percent, with points increasing to 0.50 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.41 percent from 4.39 percent, with points increasing to 0.34 from 0.18 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.55 percent from 3.54 percent, with points increasing to 0.33 from 0.24 (including the origination fee) for 80 percent LTV loans.
Commercial Real Estate Lending
Commercial Mortgage backed Securities (CMBS)– The 10 Yr Swap rate moved lower to finish the week at 2.746%, up from last weeks 2.732%.
Housing News
No Deal: New Home Sales plunge in setback to housing recovery, except in the Northeast
Sales of new U.S. single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.
The Commerce Department said on Wednesday sales dropped 14.5 percent to a seasonally adjusted annual rate of 384,000 units, declining for a second consecutive month. February’s sales were revised up to a 449,000-unit pace from the previously reported 440,000-unit rate.
Economists polled by Reuters had forecast new home sales at a 450,000-unit pace last month. Compared to March last year, sales were down 13.3 percent, the largest decline since April 2011. Read more
Existing Home Sales fall in March amid hopes for end to downturn
U.S. home resales fell to their lowest level in more than 1-1/2 years in March, but there were signs a recent downward trend that has plagued the housing market may be drawing to an end.
The National Association of Realtors said on Tuesday home sales slipped 0.2 percent to an annual rate of 4.59 million units, the lowest level since July 2012. Read more
The cost of waiting to buy a home
For Millennials who are willing and able to purchase a home NOW… Here are a couple other ways to look at the cost of waiting.
Let’s say your 30 and your dream house costs $250,000 today, at 4.41% your monthly Mortgage Payment with Interest would be $1,253.38. But you’re busy, you like your apartment, moving is such a hassle…You decide to wait till the end of next year to buy and all of a sudden, you’re 31, that same house is $270,000, at 5.7%. Your new payment per month is $1,567.08.
The difference in payment is $313.70 PER MONTH! That’s like taking a $10 bill and tossing it out the window EVERY DAY!
Or you could look at it this way:
- That’s your morning coffee everyday on the way to work (Average $2) with $12 left for lunch!
- There goes Friday Sushi Night! ($80 x 4)
- Stressed Out? How about 3 deep tissue massages with tip!
- Need a new car? You could get a brand new $22,000 car for $313.00 per month.
Let’s look at that number annually! Over the course of your new mortgage at 5.7%, your annual additional cost would be $3,764.40!
Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining. We could come up with 100’s of ways to spend $3,764, and we’re sure you could too!
Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $112,932, all because when you were 30 you thought moving in 2014 was such a hassle or loved your apartment too much to leave yet.
Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready, but if they showed you that you could save $112,932, you’d at least listen to what they had to say.
They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now… KCM
RE/Max: March home sales build momentum for 2014 All 52 metro areas record increase in sales
March home sales increased over the previous month for the first time in 2014, rising 24.6% from February, in addition to all 52 metro areas surveyed reporting an increase in sales over February, according to the latest RE/MAX National Housing Report.
But despite the month-over-month rise, home sales were down 10.1% from year ago levels. The median price of homes sold in March was 8.8% higher than the median price in March 2013. Low inventory continued to cause home prices to rise, especially in markets that have experienced an accelerated recovery. In addition, March marked the 12th consecutive month with fewer inventory losses than the previous month.
“Clearly, unexpected winter storms resulted in a slow start for housing this year, but the strong rebound in March sales could build momentum for spring and summer,” said Margaret Kelly, RE/MAX CEO. “Many potential homebuyers who weren’t able to get out and tour homes in January and February may still enter the market and impact sales in the next few months,” Kelly added.
Economic News
A measure of the U.S. economy’s health rose in March for the third consecutive month, a sign of stronger growth after harsh winter weather caused the economy’s pace to slow. The Conference Board says its index of leading indicators increased 0.8 percent in March after a 0.5 percent rise in February and modest 0.2 percent gain in January. It was the best showing since a 0.9 percent gain in November.
Economists polled by Reuters were expecting a gain of 0.7 percent in March. Both hiring and consumer outlooks have improved, fueling much of the index’s improvement.
Conference Board economists say the gains last month point to “accelerated growth for the remainder of the spring and the summer,” although it remains to be seen whether employers continue to hire at their March and February pace of almost 200,000 workers a month.
U.S. Manufacturing activity expands in April, pace stalls
The U.S. manufacturing sector expanded in April though the rate of growth was slightly lower than expected as inventories fell, but factory output growth hit its fastest pace in three years, an industry report showed on Wednesday.
Financial data firm Markit said its preliminary or “flash” U.S. Manufacturing Purchasing Managers Index dipped to 55.4 in April from 55.5 in March. Economists polled by Reuters expected a reading of 56.0. Read more
U.S. orders for long-lasting factory goods rose by 2.6 percent in March. Economists had expected goods orders to rise by 2.0 percent, slower than the prior month’s 2.2 percent gain.
First-time claims for state unemployment benefits totaled 329,000 in the most recent week. Initial jobless claims had been expected to rise to 310,000, from the previous week’s 304,000 gain.
Consumer sentiment hits 84.1 in April, versus 83 estimate
Purchasing Managers Index hit 54.2 in April compared with March’s final reading of 55.3. (A reading above 50 indicates expansion in the sector.)
Sources: CNBC, Bloomberg, Reuters, Housingwire, MMG, KCM, AP.