Weekly Economic Review: Mortgage Rates Drop to 5-Month Low, Home Resales at 10-Year High

Posted by Laine Smith on 4/21/17 10:04 AM

Topics: Economy

In this week’s economic review, mortgage rates returned to favorable lows while reports showed that home prices continue to rise and listed homes are selling quickly.

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Existing Home Sales

Home resales boomed in March, up 4.4 percent to a much higher-than-expected annualized rate of 5.710 million, the best rate since February 2007.

The median price rose 3.6 percent in the month to $236,000 with a year-over-year appreciation of 6.8 percent. Though supply did increase by 5.8 percent, the increase was quickly depleted by rapid sales, leaving the existing home supply unchanged at a 3.8-month supply.

Homes stayed on the market for an average of 34 days in March versus February’s 45 days.

Housing Market Index

According to the April Housing Market Index, home builders are still confident despite a 3-point slip to a level of 68. A highlight of Monday’s report is the traffic component, which came in at 52, making it the 4th plus-50 reading in the last 5 months, according to Bloomberg.

Housing Starts

Housing Starts for the end of the first quarter weren’t as upbeat. March starts fell a sharp 6.8 percent to the weakest annualized rate since November 2016. The declines were experienced by both single-family and multi-family homes, but both components do have year-over-year growth in the double digits.

This week in the economy:

  • The 30-year fixed-rate fell yet again as of April 20th with the average standing at 3.97 percent with 0.5 points, according to Freddie Mac.
  • Purchase applications fell a seasonally adjusted 3 percent the week of April 14 but refinance applications increased 0.2 percent, according to MBA Mortgage Applications.
  • Initial jobless claims came in at 244,000 the week of April 15, according to Bloomberg. The 4-week average fell over 3,000 to 243,000 for a third week of declines.
  • The Bloomberg Consumer Comfort Index remains strong at 49.9 despite dropping more than 1 point from the week prior.

The economic calendar for the week of April 24th, 2017:

  • Tuesday – FHFA House Price Index, New Home Sales, Consumer Confidence
  • Wednesday – MBA Mortgage Applications
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Pending Home Sales Index
  • Friday – GDP, Consumer Sentiment

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