Weekly Economic Update - 5.2.18
RATE MOVEMENT (from prior week) - UNCHANGED
Mortgage rates climbed higher during the first half of last week, then reversed direction during the second half to end nearly unchanged. The movement didn't necessarily correlate with any specific economic news.
IMPORTANT ECONOMIC FACTORS:
Home Sales - Last week’s data on home sales in March was encouraging. Sales of previously owned homes rose 1% from February and were close to the level seen a year ago. Sales of newly built homes increased 4% from February and were 9% higher than a year ago. Both readings were stronger than most economists expected. The difference in performance likely was due to the supply of homes on the market. The inventory of previously owned homes was at just a 3.6-month supply and was 7% lower than a year ago. The inventory of new homes was at a much healthier 5.2-month supply and was 13% higher than a year ago. Home builders clearly are responding to the shortage of supply.
European Central Bank – Thursday's European Central Bank (ECB) meeting provided no change in policy or new guidance for the future. ECB President Mario Draghi said that officials need more time to better understand what has caused slower growth in the region so far this year. The Eurozone economy grew at its fastest pace in a decade in 2017, but growth has unexpectedly slowed in 2018. Investors expect that the ECB will decide in June or July when to end its bond buying program (which could have a trickle effect on rates in the U.S.).
This week we have the important monthly Employment report being released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month (and CAN be a big rate mover). Still holding a LOCKING STANCE will all new transactions.
Please let me know if you have any questions in regards to this.
Thank you for your continued support, have a productive week.
SVP, Regional Manager
THE CRAWFORD TEAM