New Homes Sales Jan-Feb, Mortgage Applications down, US Capital Markets
March 23, 2016
Wednesday – March 23
The Commerce Department reported on Wednesday that February New Home Sales rose 2% from January to an annual rate of 512,000 units, near the 511,000 expected. However, sales are down 6.1% from February 2015. The median sales price rose 6.2% from January to $301,400. Inventories of new homes have been running on the low side with just 5.6 months’ worth of supply. Many economists see a pent-up demand for housing and just recently the National Association of REALTORS® stated the need for more construction to ease supply constraints. New Home Sales measures sales of newly built homes and includes both quantity and price statistics.
Despite the spring buying season being right around the corner, total mortgage application volume declined for the second straight week. The Mortgage Bankers Association reports that its Market Composite Index, a measure of total mortgage application volume, fell 3.3% in the latest week. The refinance index fell 5%, while the purchase index declined by 1% from a week earlier. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.93% from 3.94%, with points decreasing to 0.35 from 0.42.
U.S. capital markets are gearing up for an extended holiday break ahead of Easter Sunday. U.S. capital markets will be closed on Friday in observance of Good Friday. The Bond markets will close at 2:00 p.m. ET on Thursday and are closed on Friday. In Canada, the Toronto Stock Exchange will also be closed, while those markets in Europe and Asia will be closed on Friday as well as Monday March 28.