Market Recap: Builder Sentiment Improves, Mortgage Apps Mixed, Housing Starts and Building Permits Decline
Mortgage rates did not move significantly this week. Home builder sentiment hit a 6-month high. New purchase application submissions increased, but refinance application submissions declined. Housing starts and building permits are down.
The National Association of Home Builders’ (NAHB) housing market sentiment index improved by one point in April, to a level of 63. Current sales conditions increased to a level of 69, expectations for the next six months fell to 71, and buyer foot traffic jumped to 47. Any readying above 50 is considered positive. Home builder sentiment has been somewhat subdued in 2019. The average reading in 2018 was 67 and in the first four months of 2019 the average reading has dropped to 61. The recent decline in mortgage rates likely contributed to April’s positive number.
The Mortgage Bankers Association (MBA) weekly mortgage application survey returned mixed results for the week ending 4/12. New purchase application submissions increased 1.0% and refinance application submissions decreased 8.0% for a composite decline of 3.5%. Low rates spurred a surge in refinance activity, and it may be starting to taper off.
Housing starts and building permits each dropped slightly in March. Housing starts declined 0.3% month-over-month to a seasonally adjusted annual rate of 1.139 million and building permits fell 1.7% month-over-month to a seasonally adjusted annual rate of 1.269 million.
Although construction activity has weakened, conditions are still favorable. Builder sentiment has increased, mortgage rates are low, and home buyer demand is strong. The Wall Street Journal contributors Sharon Nunn and David Harrison wrote, “recent housing data suggests the existing-home sales market could be turning around as interest rates fall.”
Sources: CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily, the Wall Street Journal