Daily News 2/25/2015

February 25, 2015

Wednesday – February 25

Sales of New Homes were relatively flat in January from December, though the rate of sales are near multi-year highs. The continued improvement in the U.S. economy and the job market give hopeful signs for the sector. January New Home Sales came in at an annual rate of 481,000 units, which was above the 470,000 expected. Sales in the Northeast were sluggish due to harsh weather, where sales had the biggest decline since June 2012, falling nearly 52%. The median new home price rose 9% from a year ago to $294,300.

Fed Chair Janet Yellen was on Capitol Hill yesterday testifying in front of the Senate Banking Committee on the Federal Reserve’s monetary policy and the current state of the U.S. economy. Ms. Yellen signaled that yes, interest rates will rise this year, but the Fed is in no hurry, given the low inflation environment along with a sluggish global economy. Ms. Yellen said that the Fed will consider raising rates “on a meeting-by-meeting basis” and that “patience” remains in the Fed’s rhetoric.

Despite historically low home loan rates, mortgage application volume fell in the latest week. The Mortgage Bankers Association reported that its Market Composite Index, a measure of total loan application volume, fell by 3.5% in the latest week, while the refinance index declined 8%. The closely watched purchase index, rose by 5%. As previously mentioned, home loan rates are hovering just above record lows, but have increased in the month of February.