Updated on April 22, 2019 10:16:01 AM EDT
The National Association of Realtors announced at 10:00 AM ET this morning that home resales fell 4.9% last month. This was a larger decline than expected, meaning the housing sector was a bit softer last month than many had thought. That is favorable news for bonds and mortgage rates because a weakening housing sector makes broader economic growth more difficult and bonds tend to thrive in weaker economic conditions. Unfortunately, it does not carry enough significance to offset the overnight weakness that carried into this morning’s trading.
The rest of the week brings us the release of four more monthly and quarterly economic reports that may affect mortgage rates in addition to a couple of Treasury auctions. One of those reports is considered to be extremely important to the financial and mortgage markets and can cause a great deal of volatility. The weeks calendar, along with corporate earnings reports, makes it very likely that this will be an active week for mortgage rates.
March’s New Home Sales report will be posted tomorrow morning. This Commerce Department report tracks a much smaller portion of all home sales than today’s report does. It also gives us an indication of housing sector strength and future mortgage credit demand. However, unless it varies greatly from analysts forecasts I am not expecting the data to cause much movement in mortgage rates. Analysts are also forecasting a decline in sales of newly constructed homes. Good news for mortgage rates would be a sizable drop in sales.
Overall, Friday is the most important day of the week due mostly to the release of two reports, including the highly important initial GDP reading. Thursday may also be one of the more active days due to the Durable Goods Orders report. Wednesday is the best candidate for least important day. Throw in week two of corporate earnings season and we have plenty to watch this week. Accordingly, it is highly recommended that you maintain contact with your mortgage professional if closing in the near future and still floating an interest rate.
©Mortgage Commentary 2019