The housing industry's bell-weather index, The Case-Shiller Home Price Index was released today and it showed a year-over-year gain of 6.79% in their key 20 Metro City Composite Index, which is the fastest appreciation rate since 2014.
Broadening out from the 20-City composite, the national home-price gauge climbed 6.5% YoY, matching February’s YoY advance that was the biggest since May 2014.
“Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s, before the housing boom and bust,” David Blitzer, chairman of the S&P index committee, said in a statement.
“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising.”
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 4.00 MBS) gained +57 basis points (BPS) from last Friday's close which caused fixed mortgage rates to move lower for the week.
Overview: Geo-Political concerns were the main driving factor in pricing last week as investors poured money into the low-return but safe-haven of U.S. backed bonds. This spike in demand for our bonds caused rates to pull back to levels from two weeks ago.
Geo-Political: U.S. Treasury Secretary Steven Mnuchin declared that looming U.S. - China trade war is "on hold". The U.S. will hold off on implementing tariffs and the China has agreed to purchase more from the U.S., specifically from the agriculture segment. The next day, China's Ministry of Finance announced that it would slash passenger car duties to 15%, further opening up the market that’s been a key target of the U.S. in its trade fight with Beijing. Car parts will be slashed from 25% down to only a 6% rate.
President Trump called off the proposed summit with North Korea but left the door open for negotiations. He also signed the Dodd-Frank reform Bill.
The Talking Fed:
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.