This week, economic markets saw mortgage-backed securities experience little change. Despite significant news stemming from the housing sector, the week remained relatively quiet.
Overall, the newest data generated little effect. As a result, mortgage rates ended the week with little change.
Existing Home Sales Fall as Mortgage-Backed Securities Experience Little Change
In March 2023, sales of existing homes fell 2% from February, 22% lower than last year at this time. Inventory levels rose a little higher than a year ago, but still stand at just a 2.6-month supply nationally. The median existing-home price of $375,700 again slipped slightly lower than a year ago, down from a record high of $413,800 in June.
Compared to 2019, the inventory of existing homes for sale plummeted 40%. Analysts attribute this to the significant rise in mortgage rates. Despite mortgage-backed securities experiencing little change this week, rates have more than doubled since the end of 2022, overall. Surveys indicate that many potential sellers feel “locked in” to their current home.
NAHB Home Builder Sentiment Survey Expresses Positive Outlook
Given the ongoing shortage of available homes, there is an opportunity for builders to provide more supply, and the latest reports suggest that they are responding. Although total housing starts posted declines in March, the weakness was entirely due to multi-family units, as single-family housing starts rose 3% from February. Similarly, single-family building permits, a leading indicator, increased 4% from the prior month.
In addition, the latest survey of home builder sentiment from the NAHB rose slightly to the highest reading since September. Due to the relatively tiny number of existing homes available for sale, the chief economist of the NAHB pointed out that new homes represent over 30% of current housing inventory, far above the levels around 10%.
Looking Ahead After Mortgage-Backed Securities Experience Little Change
After mortgage-backed securities experienced little change, investors closely watch the banking sector for signs of trouble. Also, they watch the Federal Reserve for further insight on policy.
Next week, New Home Sales release on Tuesday. First quarter GDP, the broadest measure of economic activity, comes out on Thursday. Finally, personal Income and the core PCE price index, the inflation indicator favored by the Fed, publishes on Friday.
As mortgage-backed securities experience little change, mortgage rates remained roughly the same. To receive by-the-minute updates on mortgage-backed securities, try our platform free for 14 days.
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