MortgageTime Mortgage Market News for the week ended March 22, 2019
By Anonymous
Friday, March 22, 2019
| The outlook for global economic growth declined this week, which was reflected in economic data around the world and in the comments from the U.S. Fed. As a result, rates ended the week lower. |
| Outside the U.S., the economic data released this week suggested that growth may be slowing. In particular, the manufacturing data in the large European countries fell to the lowest levels in several years. Since slower economic growth reduces the outlook for future inflation, this was favorable for mortgage rates. |
| The surprisingly large shift to a more dovish (in favor of looser monetary policy) tone at Wednesday's Fed meeting was mostly due to outside risks to the U.S. economy. Because the strength of international markets impacts U.S. exports, Fed officials modestly lowered the outlook for U.S. economic growth in 2019 from 2.3% to 2.1%. The Fed also made a couple of other significant changes which suggested looser monetary policy going forward. First, the majority of Fed officials no longer think that any federal funds rate increases will be needed this year, down from a consensus forecast just last December for two rate hikes in 2019. In addition, the Fed announced that it will slow its pace of asset reduction beginning in May and will end it altogether in September, meaning that the size of the Fed's balance sheet will remain roughly steady after that time. |
|
The latest news from the housing sector showed a nice surprise to the upside, as lower mortgage rates helped boost sales activity. In February, sales of previously owned (existing) homes jumped 12% from January, which was far more than expected. The inventory of homes for sale was at a 3.5-month supply, still well below the 6.0-month supply which is considered a healthy balance between buyers and sellers, but it was 3% higher than a year ago. The median existing-home price was 4% higher than a year ago.
|
|
| Looking ahead, Housing Starts will be released on Tuesday. Pending Home Sales will come out on Thursday and New Home Sales on Friday. The core PCE price index, the inflation indicator favored by the Fed, will be released on Friday. In addition, news about the British exit (Brexit) from the European Union, which is currently scheduled to take place on March 29 but which may be delayed, could affect mortgage rates. |
