Home Prices Up. Rates Near Record Lows.

U.S. economic data today is mixed.  Home Price gains are good because they encourage home building.  Chain Store sales are up modestly which is always good.  The move in the Chicago PMI to contraction is of concern as have been the regional Fed and ISM reports lately.  The Employment Cost Index is useless.

Rates continue their lower trajectory this morning, with the Fannie 30yr 3% coupon up 4 ticks (a tick is 1/32) to 104-22. This is a key benchmark lenders watch when pricing consumer mortgage rates, and it’s near the best levels of the year. Rates drop when mortgage bond prices rise like this. That said, today is likely the last tame mortgage trading day of the week, then rates will probably get more volatile as tomorrow’s Fed rate/QE policy announcement is made, followed by Friday’s April jobs report.

This is the sweet spot folks: rising home prices and near record rates. It won’t last.

S&P Case-Shiller Home Price Index (February 2013)

– 20-city, seasonally adjusted – Month/Month +1.2% . Previous was +1.0%

– 20-city, not seasonally adjusted  – Month/Month  0.3%. Previous was 0.1%

– 20-city, not seasonally adjusted  -Year/Year  9.3 %. Previous was 8.1%.

Full report here and charts below

CaseShiller1

CaseShiller2

Chicago PMI (April 2013)

– Business Barometer Index 49.0.

– A reading below 50 indicates contraction. This is first below 50 reading of Chicago PMI in the past 42 months.

– The regional reports from the Fed districts and the  Institute For Supply Management have been weak lately. 

ICSC-Goldman Chain Store Sales (week ended 4/27/2013)
– Store Sales – Week/Week +0.4%. Previous was +0.8% Store Sales

– Year/Year +2.6% Previous was +1.9%.

Redbook Chain Store Sales (week ended 4/27/2013)
– Store Sales Year/Year 2.8%. Previous was 1.8%.

– These are moderately positive.

Employment Cost Index (1Q2013)
– ECI – Quarter/Quarter +0.3%

– ECI – Year/Year 1.8%

– This is the cost of labor (salaries plus benefits).  Before you act on this read this from the BLS folks who published the data:

“BLS has discovered an error in the benefits data for March 2013 primarily affecting private industry benefits data for sales and office occupations. As a result, benefits estimates for March 2013 have been temporarily suppressed for sales and office occupations…”

Consumer Confidence (April 2013)
– Consumer Confidence  68.1.

– Previous was revised to 61.9 which was 8 point below February. 

– This data is from the Conference Board and is supposed to measure consumer predisposition to spend.

– I don’t think that this really measures much more that the psyche of consumers which is be buffeted about by gas prices and other news.