Continuing their sideways trend, mortgage rates hung out within the same .10 percent range over the last week, according to Freddie Mac’s weekly survey of average rates. Analysts are finally seeing the issues over the debt ceiling to have a visible impact on longer-term bonds, which may translate to lower interest rates. We’ll have to wait and see how it plays out, but we could see a little improvement in rates.
As for news out of the housing market, we saw New Home Sales of single-family homes reach a 13-month high, rising for the third consecutive month. Sales of new homes were up 4.1 percent from the prior month, beating economists’ expectations. The median sales price came down 7.7 percent from the month before, which likely was a driver for rising sales rates. The median sales price was $420,800 and the average was 501,000, also down 10.4% from the previous report.
The rise in sales is attributed to great builder incentives and buyers becoming more comfortable with the level of mortgage rates. In most areas, now is a great time to buy! Think about it, with appreciation, you’re still likely to be making money on your investment in your home. Plus, if and when rates improve, you may be able to refinance; but if they go up, you’ll be glad you bought when you did! If you want to run the numbers and see what the scenario could look like for you, reach out and give me a call or text me and let’s talk. You can simply reply to this email or call/text me at 818.307.6072.
As for other high-impact data coming out this week, we’ll see the latest numbers for first quarter GDP (gross domestic product). The second estimate, at 1.1 percent consensus growth, is expected to remain unchanged from the quarter’s first estimate. Although slower expansion, it is expansion nonetheless.
Friday brings the Fed’s favorite inflation indicator, the PCE Index. We’re expecting to again see persistent inflation. Inflation readings for April are predicted at monthly increases of 0.3 percent overall and also 0.3 percent for the core (versus respective increases of 0.1 and 0.3 percent). Annual rates are seen at 4.3 and 4.6 percent (versus March’s 4.2 and 4.6 percent).
