THE BASIS POINT

Rates Up Before Christmas: Stat Roundup & Trading Reaction

 

30-year fixed mortgage rates head into Christmas at about 5% for a single family home loan up to $417,000, and about .25% higher for larger loans and most condo loans. Bond markets close at 2:00 ET today and reopen Monday. While today’s inflation report was flat, mortgage bonds sold off and pushed rates higher on better than expected home sales, and two forward looking concerns: (1) $99b in new bond supply will hit markets next Monday ($35b 2yr T-notes), Tuesday ($35b 5yr T-notes), Wednesday ($29b 7yr T-notes), and (2) extension of Bush tax cuts means the Fed may act more quickly than originally expected to hike rates. Below is a roundup of stats on home sales, consumer spending and income.

Consumer Spending, Income, Inflation
Today the Fed’s favorite consumer inflation measure was flat: the November Personal Consumption Expenditures Index was up .1% from October and 1% higher than November 2009. Excluding volatile oil and food costs, “Core” November PCE was up .1% from October and .8% higher than November 2009. The Fed’s zone for reasonable inflation is 1-2% per year. Personal income was up .3% in November, which is consistent the range of the last 9 months. Wages rose .1%, which is down meaningfully from .5% in October and the rest of 2010. The household savings rate was 5.3%. Below are all key details from the Personal Income & Outlays report. You can automatically create charts and download historical PCE data by scrolling to our data section on the right side of the site.

New & Existing Home Sales
Today the Census bureau reported that sales of new single-family houses in November 2010 were at a seasonally adjusted annual rate of 290,000, which is 5.5% above October but 21.1% below the November 2009 figure of 368,000. The September median new home sale price $213,000 and the average sales price was $268,700. The seasonally adjusted estimate of new houses for sale at the end of September was 197,000. This represents a supply of 8.2 months at the current sales rate.

Yesterday, the National Association of Realtors reported that November existing home sales (which are completed transactions on single-family, townhomes, condominiums and co-ops) were up 5.6% to a seasonally adjusted annual rate of 4.68 million from from 4.43 million in October, but are 27.9% below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit. The national median existing home price for all housing types was $170,600, which is up 0.4% from a year ago. Distressed homes accounted for 33% of sales in November; they were 34% in October and 33% in November 2009.

 

READ OUR NEWSLETTER

YOUR COMPETITORS ALREADY DO

Comments [ 0 ]

WHAT DID WE MISS? COMMENT BELOW.

All comments reviewed before publishing.

one × four =

NEED CLARITY IN ALL THIS CONFUSION?

GET OUR NEWSLETTER.

x