Owning your home is still one of the best ways to achieve wealth and as Plato once said “Wealth is known to be a great comforter.” Happy Birthday to Plato who would have turned 1,592 years old today and he lived forever.
We shifted to a locking bias last week and that proved to be the correct call. Although mortgage note rates are mostly unchanged the pricing has worsened meaning the accompanying closing costs are modestly worse.
Earlier today the National Association of Realtors released the monthly existing home sales report. It showed that the number of homes sold during April actually contracted by nationwide. However, on the west coast the number of existing home sales actually accelerated by 1.8% from March.
Coincidentally, the average number of days on market contracted from 36 days down to 24. There is no question that the housing market is less frantic than it was a couple years ago but demand remains strong.
The Week Ahead
This week’s economic calendar is relatively light. On Wednesday we’ll get the minutes from the most recent Federal Reserve monetary policy meeting but no fireworks are expected. On Thursday we’ll see numbers for new home sales.
In the absence of significant economic data I expect mortgage rates to take direction from the stock market. If stocks rally then I expect home loan rates to worsen and vice versa.
Investors remain concerned over US-China trade talks and the ongoing Brexit saga. Any signals that either of these story lines will resolve themselves sooner rather than later would be bad for mortgage rates.
Current Outlook: neutral