Home Sales Rise, Durable Goods Index, Mortgage Rates
May 26, 2016
Thursday – May 26
Signed contracts to purchase existing homes soared in April from March, as the housing sector continues to field positive news. April Pending Home Sales jumped 5.1% from the previous month hitting the highest level in 10 years. Estimates were calling for a meager 0.6% gain. The index is up 4.6% from April of 2015. “The ability to sign a contract on a home is slightly exceeding expectations this spring even with the affordability stresses and inventory squeezes affecting buyers in a number of markets,” said Lawrence Yun, the National Association of REALTORS®’ chief economist in a release.
Orders placed for goods lasting more than three years, such as washers and dryers, surged in April, reported the Commerce Department on Thursday. The Durable Goods Orders Index rose 3.4% from March to April, well above the 0.6% rise expected. The big driver in the index was a near 65% increase in civilian-aircraft orders. This increase of 3.4% is up three of the last four months, following a 1.9% March increase.
Mortgage rates edged higher this week, though still remain just above the all-time lows. Last week, the Federal Reserve Bank of the U.S. painted a more hawkish picture for future interest rates, meaning that they could move higher sooner, rather than later. Freddie Mac reported that the 30-year fixed conventional mortgage rate ($417,000 or less) rose to 3.64% this week from 3.58% last week. To obtain that rate, a potential borrower would have to pay 0.5 in points and fees. Freddie Mac said that mortgage rates in May saw the lowest monthly average in nearly three years.
