Mortgage rates continued to inch higher last week according to Freddie Mac’s weekly survey of rates. We expect to see this trend continue as the yield on the 10-year Treasury bill moves higher as well. Despite rates moving a little higher, the housing market continues to be red hot and experts are predicting a brisk spring homebuying season.
As for data this week, we’ll get a look at the Fed’s favorite inflation indicator, as well as the nation’s GDP (gross domestic product), and the numbers for Existing & New Home Sales. Fed Chair Jerome Powell will be speaking Monday, Tuesday, and Wednesday which will likely grab the attention of markets and traders.
What I’m watching this week…
We kicked off the week Monday morning with the latest numbers of Existing Home Sales. Existing home sales beat expectations in February at a 6.690 million annual rate. March’s expectations call for a step back but not by as much as sales retreated. Home sales fell by 6.6 percent as continued inventory shortages kept buyers at bay.
Tuesday we got a look at New Home Sales which accelerated going into year-end but remained off prior highs. February’s actual sales slowed to 775,000 falling short of consensus expectations of 875,000 annual rate versus January’s higher-than-expected 923,000.
Durable goods orders, a leading indicator of economic activity, are expected to remain solid but slow in February from January’s 3.4 percent aircraft-driven surge. Core capital goods have also been solid with February orders seen at plus 0.6 percent.
On Thursday we get a look at the third estimate of fourth-quarter GDP which is expected to be unrevised, at plus 4.1 percent overall.
Friday brings the Fed’s favorite inflation indicator (PCE Index), a number that will be closely watched as a counterpoint to the consumer price data we’re keeping an eye on. As we know, inflation is the archenemy of bonds so if we see more inflation show up than expected, bonds could suffer, urging mortgage rates higher still. The core PCE price index rose a stronger-than-expected 0.3 percent on the month in January with a more modest gain of 0.2 percent the expectation for February; this annual rate is seen unchanged at 1.5 percent.
If you are planning a home purchase this year, let’s talk about it and come up with a plan for your financing. As we see rates changing, it’s important to know what that means for your specific situation.