Overview: It was another quiet week. The major economic data released over the past week came in mostly on target and caused little reaction, and mortgage rates ended nearly unchanged.
In October, sales of previously owned homes increased 2% from September to an annual rate of 5.48 million — above the consensus of 5.40 million. Once again, a shortage of inventory held back sales in many regions. Total inventory of existing homes for sale fell to a 3.9-month supply, which was 10% lower than a year ago. A 6.0-month supply is considered a healthy balance between buyers and sellers. Still, there are encouraging signs that home building activity may pick up soon. In October, single-family housing starts rose 5% from September, and in the South — the region most heavily affected by the hurricanes — single-family starts jumped 17% from September to the highest level since 2007.
President Trump has a rare opportunity to substantially reshape the Federal Reserve, as he will get to appoint five out of the 12 voting Fed members. Trump recently nominated Jerome Powell to be the next Fed Chair. Current Fed Chair Janet Yellen, who had the option to remain on the Fed board as a governor for another six years, announced that she will not stay when her successor is sworn in. Even though there will be many new Fed members, Powell is expected to maintain a similar course for monetary policy as Yellen. .
Looking ahead, mortgage markets will be closed on Thursday and will close early on Friday in observance of Thanksgiving. After that, the New Home Sales report will be released on November 27. The second estimate of third-quarter gross domestic product (GDP) will come out on November 29, and the core Personal Consumption Expenditures (PCE) Price Index will be released on November 30. .