Some good news nationally as housing data in April provided some unexpected signs of hope that the housing market may be stabilizing.
While still premature to declare that ‘the bottom has been reached, we may be getting close.
Positive permits and housing starts data was followed by a rare up-tick for new home sales in April.
While April was the first time in over a year that single-family building permits posted a monthly gain, it was also the first time since October 2007 that new home sales posted an increase.
However, the gain could be attributed to aggressive price cuts by builders in an attempt to undercut the resale market.
We continue to see positive fundamental changes in the new homes market like declining inventory levels and improved affordability levels.
It will important for this kind of progress to continue as this year’s home-buying season is more important than ever.
Equities swung back and forth during the past week as the market tried to digest record-high crude prices, concerns about inflation, but relatively positive economic data.
Leading indicators suggested that economic growth may have bottomed out as the index posted a slight increase in April.
Revised GDP also showed that the economy grew at a slightly faster pace than the advance report had shown.
And while crude ended the week trading at over $127/barrel, it reached a new all-time high earlier in the week.
Sustained high crude prices will continue to hurt consumer discretionary spending along with igniting concerns of inflation going forward.
If price pressures begin to increase, it will not be surprising for the Fed to raise rates before the end of the year.
This Week Last Week
30-Year Fixed 6.08% 6.02%
15-Year Fixed 5.63% 5.60%
Jumbo (30-Year) 7.26% 7.21%
5/1 ARM 5.34% 5.45%