Blog posted On December 27, 2019
Markets were closed on Wednesday, in observance of the Christmas holiday. Mortgage rates did not move significantly last week, trending slightly upward. New home sales increased, driven by strong buyer demand. New purchase and refinance mortgage application submissions each declined amidst seasonal slowdown. Jobless claims fell.
New home sales or the sales of newly constructed homes increased in November, to a seasonally adjusted annual rate of 719,000. Month-over-month sales are up 1.3% and year-over-year sales are up a significant 19.4%. Data differed from region to region. The Northeast saw a substantial gain of 52.4%. The West saw a more modest increase of 7.5%. Data was flat in the Midwest and down 4.1% in the South. New home sales are expected to strengthen in 2020, the National Association of Home Builders’ (NAHB) housing market index posted a record gain in December.
The Mortgage Bankers Association (MBA) weekly mortgage application survey declined a composite 5.3% for the week ending 12/20. New purchase application submissions and refinance application submissions each fell 5.0%. Mortgage activity tends to slow toward the end of the year with potential home buyers and homeowners looking to refinance taking a break to focus on holiday activities. The data also might suggest just how rate sensitive buyers have become, since mortgage rates have climbed slightly this month.
The weekly jobless claims report continued to return historically low numbers for the week ending 12/21. Initial jobless claims fell to seasonally adjusted rate of 222,000 and continuing claims also dropped to 1.72 million.
Even with some fluctuation in mortgage rates, average rates are historically low. Mortgage activity is expected to pick up in 2020, with new home construction picking up and buyer demand still strong.