Weekly Economic Update - 6.1.18
I hope you had a great week.
RATE MOVEMENT (from prior week) - SLIGHTLY LOWER
Geopolitical events related to Italy and North Korea were the primary influences on mortgage rates last week. The U.S. economic data mostly came in on target and caused little reaction. Mortgage rates slightly improved from the seven-year highs reached the prior week.
IMPORTANT ECONOMIC FACTORS:
International News - Italy formed a new government, and the political parties in control of the coalition have changed significantly. The new leaders have shown little support for remaining in the European Union (EU). This does not mean that Italy will ultimately exit the EU, but the risk has certainly increased. President Trump canceled the planned historic U.S. summit with North Korea and the uncertainty about the future of the EU and the relations with North Korea created by these events caused investors to shift to safer assets, including U.S. mortgage-backed securities (MBS). This additional demand for MBS helped push mortgage rates lower.
Housing Data – The housing data released revealed that sales of both new and previously owned homes have held relatively steady each month so far this year. In April, sales of previously owned homes fell a bit from March, but they were close to the level seen a year ago. Sales of newly built homes also fell a little from March, but they were 11.6% higher than a year ago. The difference in annual performance was mainly due to the supply of homes on the market. The inventory of previously owned homes was at just a 4.0-month supply, 6.3% lower than a year ago. The inventory of new homes was at a much healthier 5.4-month supply, 12.4% higher than a year ago.
Looking ahead, we have the important monthly Employment report released this morning. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month.
As I have stated in prior reports, I strongly believe that if anyone is interested in pursuing a mortgage financing (whether it be a purchase or refinance), the sooner the better.
Please let me know if you have any questions in regards to this, or if there is anything we can do.
Thank you for your continued support, have a great weekend.
SVP, Regional Manager
THE CRAWFORD TEAM