Tucson Mortgages Home Loan News 10-28-2019

By Todd Abelson NMLS #180858 on .
  • Weekly Review: week of October 21, 2019
  • Economic Calendar – week of October 28, 2019
  • Mortgage Rate Forecast with Chart

Weekly Review

The major stock market indexes ended higher for the week with the NASDAQ and S&P 500 trading above all-time closing highs on Friday.  It’s likely to believe that Stocks will continue to move higher and set new all-time closing highs with the progress in the US and China trade talks, as well as strong earnings data.  Bonds ended the week lower, closing beneath some very important technical levels.

The news of the week was focused around housing.  The Existing Home Sales report for September, which measures closings in that month and likely represents buyers shopping for homes in July and August, decreased 2.2%.  This is a pullback from last month…but last month was a 17-month high and this is the 2nd best number in that time span, so it’s still very strong.  The media would lead you to believe that this was a weak report, but don’t be fooled.  Sales were up 2.6% year over year last month, which has increased to 4% this month.

The Median Home Price was reported at $272,100, up 5.9% year over year.  Total inventory at the end of August was down 2.7% year over year.  At the current pace of sales, there is a 4.1-month supply, up from 4.0 months last month.  This also speaks to the strength of the housing market – Even with prices up and inventory down, sales are still at very solid levels.

First-Time Homebuyers represented 33% of sales, which is up from last month’s 31% and is a good sign.  Cash Transactions accounted for 17%, which was down from 19% last month.  Distressed sales accounted for 2% in September, which was unchanged from August.

Appreciation is Still Standing Strong according to the FHFA.  The FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts.  Today’s report showed that home prices rose 0.2% in August and 4.6% year over year.  This was slightly lower from the previous report, which was reported at 5.0%, but still a very strong number.

New Home Sales, which measures signed contracts on new homes, were down 0.7% in September.  But we have to remember that the August reading was the best number in 12 years.  CNBC’s Diana Olick said that this was a huge miss and there was a huge revision to August…Really?  The report was stronger than expectations and the August report was revised lower by 0.9%…hardly huge.

Today’s report, showing 701,000 New Home Sales, was still extremely strong and reading which was much stronger than market expectations.  Year over year sales are up 15.5%, but there is no mention of that.  Once again, don’t let the negative media fool you.

The Median Home Price was reported at $299,400, down 8.8%.  Most of the sales are happening in the lower end of the market…Prices are not going down.  The estimate of new homes for sale at the end of September was 321,000.  At the current pace of sales, there was a 5.5 month’s supply, which was unchanged.

Economic Calendar – for the Week of October 28, 2019

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

Mortgage Rate Forecast with Chart – UMBS 30-Year 3.0% Coupon Bond

Mortgage Bonds broken beneath the 100-day Moving Average on Monday, which was a negative technical sign.  Bonds tested that level throughout the week, but failed to break back above it.  Unfortunately, it looks like Bonds will move lower before improving, as you can see there is significant downside risk until reaching the next level of support at 100.547.