“It’s gonna be a bright sun-shiny day.” (Johnny Nash) The sun was shining on new home sales in May, as they reached their highest level since November.

New Home SalesSales of new homes rose 6.7 percent from April to an annual rate of 689,000, the Commerce Department reported. However, April’s sales figure was revised lower to 646,000 from the original reading of 662,000. From May 2017 to May 2018, sales surged 14.1 percent. There was a 5.2-month supply of new homes for sale on the market, just below the 6 months that is considered normal.

The final reading on Gross Domestic Product for the first quarter of 2018 came in at 2.0 percent, below the second reading of 2.2 percent. GDP is the monetary value of all finished goods and services produced within our borders in a specific time. It is considered the broadest measure of economic activity. GDP readings between 2.5 to 3.0 percent are considered healthy, so the final reading for the first quarter was a disappointment. However, many forecasters are expecting a stronger GDP reading for the second quarter.

The inflation-measuring Personal Consumption Expenditures (PCE) and Core PCE, which excludes volatile food and energy prices, both ticked up 0.2 percent from April to May, in line with expectations. However, on an annual basis Core PCE ticked up to 2.0 percent, after rising 1.8 percent annually in April. The bottom line for inflation is that it reduces the value of fixed investments like mortgage bonds. Home loan rates are tied to mortgage bonds, so rising inflation can also cause rates to move higher.

For now, home loan rates remain attractive historically.

Fireworks could continue Friday once the June Jobs Report is released.

  • Manufacturing news via the ISM Index will be released on Monday.
  • On Thursday, the ADP National Employment Report, weekly Initial Jobless Claims and the ISM Services Index will be delivered.
  • Also on Thursday, the minutes from the June FOMC meeting will be released.
  • On Friday, look for the closely-watched Jobs Report for June, which includes Non-Farm Payrolls, the Unemployment Rate and Hourly Earnings.

If you or someone you know is wondering about home loan products or rates, please reach out. I’d be happy to help.

Related Articles

“This ain't love, it's clear to see. But darling, stay with me.” (Sam Smith) It’s clear to see there “ain’t” much love in the process of the U.K. leaving the European Union (EU) in the so-called “Brexit.” The long-awaited Brexit agreement was dealt a big blow this past Thursday when…
Read More of the post Brexit Trouble Good for Dollar & Mortage Rates

"I’m on my way, I’m on my way home sweet home"- Home Sweet Home, Motley Crue Last Tuesday, many politicians went "home" after the midterm election results and the day ended with a split of power between the House and Senate. The markets and the Fed will now be watching…
Read More of the post Getting Back to Normal

Home Loan Rates Nov 9 2018

"I’m on my way, I’m on my way home sweet home"- Home Sweet Home, Motley Crue Last Tuesday, many politicians went "home" after the midterm election results and the day ended with a split of power between the House and Senate. The markets and the Fed will now be watching…
Read More of the post Home Loan Rates

“Workin’ 9 to 5, What a way to make a livin’.” (Dolly Parton) This past week showed more and more people working 9 to 5 and home loan rates didn’t like it. First the ADP Report on Wednesday showed 224,000 private jobs created, well above the 184,000 expected. Then on…
Read More of the post Jobs and Wages Better Than Expected