First-time Home Buyers rise in sales, Freddie Mac reported mortgage rates edged higher, First time unemployment

July 21, 2016

Thursday – July 21

First-time home buyers fueled the rise in sales of previously owned homes last month as the housing sector continues to shine in a somewhat mediocre economy. The National Association of REALTORS® reported that Existing Home Sales in June rose 1.1% from May to an annual rate of 5.57 million units, above the 5.50 million expected. Sales are up 3% percent from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).The share of first-time home buyers was 33% in June, which is up from 30% in May, and a year ago, and is the highest since July 2012 (34%). Sales fell 1.3% in the Northeast, up 3.8% in the Midwest, were unchanged in the South, and ticked up 1.7% in the West.

Freddie Mac reported that mortgage rates edged higher for the second week in a row to 3.45% for the 30-year fixed conventional rate ($417,000 or less) with 0.5 in points and fees. The uptick in rates is due in part to the Brexit headlines easing, which pushed investors out of the safe haven of the Bond markets and into riskier assets, such as Stocks. When Bond prices decline, interest rates tend to push higher and vice versa. Freddie Mac went on to say that it doesn’t see “any significant movement in mortgage rates in the near-term.”

Americans filing for first-time unemployment benefits remained near 43-year lows in the latest week as the labor market continues its positive momentum. Weekly Initial Jobless Claims fell 1,000 to 253,000, below the 265,000 expected. Claims have now remained below 300,000, a threshold associated with a healthy labor market, for 72 straight weeks, the longest stretch since 1973. The four-week moving average of claims, which irons out week-to-week volatility, fell 1,250 to 257,750 last week.