Overview: With little major economic news, it was a quiet week for mortgage markets. The most significant reports came from the housing sector and had minimal impact. As a result, mortgage rates ended the week nearly unchanged, remaining near their highest levels since November.
After a large increase in February, sales of previously owned homes slipped in the latest report. In March, sales of existing homes, which make up about 85% of the market, fell 4% from February. Inventory levels stand at just a 3.2-month supply nationally, well below the 6-month supply typical in a balanced market. The shortage of inventory was even worse a year ago, however, as current levels are 14% higher than last year at this time. The median existing-home price of $393,500 was up 5% from a year ago and a record high for the month of March. Surprisingly, despite a lack of affordable homes, first-time buyers represented 32% of sales in March, up from just 26% last month.
The latest results were far more positive for the segment containing newly constructed homes. In March, new-home sales, which account for the remaining 15% of the market, unexpectedly jumped 9% from February to the highest level since September. The median new-home price of $430,700 was 2% lower than last year at this time. While existing-home sales measure actual closings during the month, new-home sales are based on contracts signed, making them a leading indicator of future housing market activity.
The unfavorable impact of high rates was felt in mortgage application volumes this week, according to the latest data from the Mortgage Bankers Association (MBA). Purchase applications fell slightly from the prior week and are down 15% from last year at this time. Applications to refinance dropped 6% from last week but were 3% higher than one year ago.
Existing-Home Sales (millions)
Week Ahead
April 25
Q1 gross domestic product (GDP)
April 26
Personal Income and Outlays
Personal Consumption Expenditures (PCE) Price Index
May 1
Federal Reserve meeting (no rate change expected)
Institute for Supply Management (ISM) Manufacturing Index
May 3
Employment Report