taff@firstimperialmortgage.com

By Taff Weinstein at

Existing Home Sales and Prices Increase

Existing-home sales rose in October, according to the National Association of Realtors. The four major U.S. regions were split last month, with the Midwest and the South seeing growth, and the Northeast and the West both reporting a drop in sales.

Total existing-home sales are completed transactions that include single-family homes, townhomes, condominiums and co-ops.  They increased by 1.9% in October to a seasonally-adjusted annual rate of 5.46 million units, overall sales are now up by 4.6% from a year ago (5.22 million in October 2018).

The median existing-home price for all housing types in October was $270,900, which is up 6.2% from October 2018 ($255,100), prices rose in all regions. October’s price increase marks 92 straight months of year-over-year gains.

Total housing inventory at the end of October sat at 1.77 million units, which is down approximately 2.7% from September and 4.3% from one year ago (1.85 million). Unsold inventory sits at a 3.9-month supply at the current sales pace, down from 4.1 months in September and from the 4.3-month figure recorded in October 2018.

Properties typically remained on the market for 36 days in October, up from 32 days in September and consistent with October 2018 numbers. Forty-six percent of homes sold in October 2019 were on the market for less than a month.

Source: National Association of Realtors

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 3.500 MBS) gained just +1 basis point (BPS) from last Friday's close which caused fixed mortgage rates to remain at or near the same levels as the prior week.

Overview: We had a fairly quite week in the bond market and the net change of only one basis point is certainly reflective of that. We had some solid housing news but no major economic releases that had the gravitas to impact mortgage rates.  The bond market (which controls mortgage rates) was held in a narrow range as there was nothing really new on the trade front.

Consumer Sentiment: The final reading of the November UofM Consumer Sentiment Index increased from 95.7 to 96.8.

Taking it to the House: October Existing Home Sales were in line with estimates (5.46M vs est of 5.47M), it was a very solid report.   October Existing Home Sales were in line with estimates (5.46M vs est of 5.47M), it was a very solid report. October Building Permits were higher than expected (1.461M vs est of 1.385M).  The SFR component moved up by 3.2% to 909K. Housing Starts came in at 1.314M vs est of 1.32M. The SFR component moved up by 2% to 936K. The November NAHB Housing Market Index remains in very high territory, coming in at 70. October the reading was 71. Any reading above 50 is positive and readings in the 70s are very high.

Manufacturing: The November Philly Fed Manufacturing Survey was stronger than expected (10.4 vs est of 7) and was double October's pace.

The Talking Fed: We got the Minutes from the last FOMC meeting you can read the official release here.

Central Bank Palooza: The People's Bank of China dropped their key interest rate from 4.20% to 4.15%.

Central Bank Palooza: The Central Bank Palooza:  The People's Bank of China dropped their key interest rate from 4.20% to 4.15%. dropped their key interest rate from 4.20% to 4.15%.

What to Watch Out For This Week:

The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

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

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