SALES OF NEW HOMES SURGE IN THIS WEEKS ECONOMIC DATA

Dated: 05/31/2016

Views: 634

Following a volatile period due to increasing expectations for federal funds rate hikes by the Fed, mortgage markets were relatively quiet over the past week. Speeches from Fed officials, encouraging U.S. housing reports, and disappointing European data caused only a small reaction in mortgage rates. Mortgage rates ended the week slightly lower.

The housing data over the last few days was a pleasant surprise. In April, sales of both new and existing homes exceeded expectations. Annualized sales of new homes rose a surprising 17% over March, to the highest level since January 2008. This is normally a volatile number month to month, but this amount of growth can only be viewed as very positive. Sales of existing homes also grew in April. This was the second month in a row for growth in sales of existing homes.

Due to improvement in the U.S. economy, Fed officials have been seeking to boost investor expectations for rate hikes this year. The European Central Bank (ECB) is in a different position. The most recent reading for the PMI index in the euro zone dropped to a 16-month low. The PMI is a composite of services and manufacturing activity. The decline took place despite increasing levels of stimulus from the ECB. The weak economic growth in the euro zone leaves ECB officials considering whether more stimulus is needed. Low euro zone inflation and significant central bank stimulus have caused European bond yields to drop to very low levels. This has helped to keep down U.S. bond yields, including mortgage rates.

Blog author image

Jessica Rojas

Jessica Rojas is an extremely dedicated and committed real estate agent who has been working in the Real Estate field since 1997. She became a licensed real estate agent in 2009 as a sales associate ....

Want to Advertise on this Site?

Latest Blog Posts

Three Things That Make Now The Perfect Time To Sell

COVID-19 is still creating a lot of uncertainty—which has many homeowners wondering whether now is a good time to sell their home.Well, as it turns out, now isn’t just a good time to sell your

Read More

5 Stages Of Grief After Losing A Bid On Your Dream Home And How To Avoid Them

When we think of real estate, we tend to think of the positives: a place to call our own, beautiful interior design, and—if ratings are any indication—all the wildly entertaining real estate TV

Read More

Selling Your Home Watch Out For These Stressors

There are a lot of moving parts when it comes to selling your home—and for many sellers, those moving parts can cause a good amount of stress. But what are the most stressful parts of the

Read More

Fewer Houses On The Market Presents A Prime Opportunity For Sellers

After putting their home search on hold during the height of the COVID-19 pandemic, buyers are returning to the market ready and eager to purchase a home. But the biggest challenge facing them in

Read More