Week in Review
By Karen Lawson
Scheduled monthly readings were released for new home sales and consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
New Home Sales Beat Expectations in February
Sales of new homes dropped 4.40 percent in February after reaching a 13-year high in January. 765,000 new homes were sold on a seasonally-adjusted annual basis, which exceeded expectations of 750,000 sales in February. New home sales were 14.30 percent higher year-over-year.
Analysts said that further declines monthly new home sales are expected as the coronavirus spreads.
The national median price for a new home was $345,900 and there was a five-month inventory of new homes for sale in February; this was the lowest inventory of new homes since 2017.
Regional sales rose 39 percent in the Northeast and 7.00 percent in the Midwest. Sales rose 1.00 percent in the South and fell by 17 percent in the West.
Mortgage Rates Mixed After Fed Moves to Create Stability
Freddie Mac reported lower average rates for fixed-rate mortgages last week; rates for 30-year fixed-rate mortgages dropped 15 basis points to 3.50 percent. Rates for 15-year fixed-rate mortgages fell by 14 basis points to an average of 2.92 percent. The average rate for 5/1 adjustable rate mortgages rose 23 basis points to an average rate of 3.34 percent; this was caused by rising yields for 5-year treasury bills.
Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.
Sharp adjustments in mortgage rates and financial markets continued last week and are likely to continue as uncertainty increases over coronavirus impacts. Analysts noted that as tenants face prolonged unemployment, landlords will also be impacted when rents aren’t paid. The stimulus payments of $1200 per adult will not cover one month’s rent for households in high-cost housing market.
First-time Jobless Claims Skyrocket as Consumer Sentiment Falls
3.28 million initial jobless claims were filed last week as compared to 282,000 claims filed the prior week. Analysts project higher numbers of jobless claims as the coronavirus spreads and more employers close their doors. Not surprisingly, consumer sentiment fell in March according to the University of Michigan’s Consumer Sentiment Index.
The March index reading dropped to 89.1 from February’s reading of 95.9. Analysts expected a March reading of 89.0.
What’s Ahead
This week’s scheduled economic news includes readings on pending home sales, Case-Shiller Home Price Indices, and labor-sector readings on job growth and national unemployment.
Sources:
MarketWatch Economic Calendar
https://www.marketwatch.com/tools/calendars/economic
MarketWatch: New home sales drop 4.4 percent after January’s 13-year high
Freddie Mac PMMS
Many homeowners enjoy DIY, or Do-it-Yourself, home improvement projects. There’s nothing quite like the pride of knowing you used your own hands to put together or improve something.
If you have paid attention to the news recently, you have probably heard about the coronavirus pandemic which also goes by the name COVID-19. Those who are exposed to the virus might be asked to place themselves in quarantine. Some states have even told their residents to shelter in place. While this infection has forced everyone to change the way they live their lives, there are still some home improvement projects you can tackle during quarantine to put your free time to use.
Think of backyard space as “in-between” or transitional space that is a bit like being inside while being outside. Sunrooms, screened-in covered patios, outdoor kitchens, spas, fire pits and more, are all becoming very popular ways to make more use of the backyard. Making use of the outside area is not limited to only the times of the year that have nice, warm weather.
According to data from the National Association of Realtors, existing-home sales increased by 3.6% in December 2019. That pace is the strongest month-over-month in almost two years, since February 2018. The sales figures were also up 10.8% from what they were in December 2018.