MARKET COMMENT
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates started the week higher Monday morning amid reports that OPEC cut a deal to reduce production to attempt to increase oil prices. The negative trend continued Tuesday morning. Stocks saw solid gains Tuesday despite earnings losses across many sectors. Weakness in the data started to appear but varied. Retail sales fell 8.7% vs the expected 10% decline. Industrial production fell 5.4%. Analysts looked for a 3.7% decrease. Capacity use was 72.7% vs 74.1%. The NAHB housing market index was 30 vs the expected 57. Weekly jobless claims were higher than expected, housing starts were weaker, and the Philadelphia Fed report showed significant weakness. Mortgage interest rates finished the week worse by approximately 1/2 to 5/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Existing Home Sales | Tuesday, April 21, 10:00 am, et | 5.4M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| FHFA House Price Index | Wednesday, April 22, 10:00 am, et | Down 0.2% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, April 23, 8:30 am, et | 5.8M | Important. An indication of employment. Higher claims may result in lower rates. |
| New Home Sales | Thursday, April 23, 10:00 am, et | 661K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Durable Goods Orders | Friday, April 24, 8:30 am, et | Down 12% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, April 24, 10:00 am, et | 67 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
NEW HOME SALES
New Home Sales data is compiled monthly by the Department of Commerce’s Census Bureau and is gathered from builders throughout the country. The data represents new home sales for the nation as well as four areas of the country: the Northeast, the Midwest, the South, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided.
The data is an important indicator because it shows any strength or weakness in the housing sector. The housing sector data is valuable because when consumer spending changes, it appears in this sector first. Consequently, a chain reaction typically occurs. A slowdown in new home sales tends to lead to a slowdown in housing starts, which will continue to affect other indicators possibly continuing the economic worries, as has been the recent concern of most everyone. New Home Sales data is often volatile and difficult to predict. Most analysts look at a three-month average in order to see any trends in the growth rate. The data remains significant in showing the condition of housing.
Sales of new single-family houses in February 2020 were at a seasonally adjusted annual rate of 765,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. The median sales price of new houses sold in February 2020 was $345,900. The average sales price was $403,800.
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