Morning Report: Pending Home Sales rise

Vital Statistics:

S&P futures3,99823.00
Oil (WTI)76.22-0.23
10 year government bond yield 3.93%
30 year fixed rate mortgage 6.70%

Stocks are higher this morning on no real news. Bonds and MBS are up.

The upcoming week will have a lot of data, although it probably won’t be all that market-moving. We will get the ISM data, home prices and productivity. The jobs report will be next Friday, not this one. We will also get earnings from Rocket and United Wholesale.

Pending Home Sales rose 8.1% MOM, but are still down 24% compared to a year ago. That said, NAR doesn’t really see much of a pickup in home sales until 2024. “Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun. “Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Yun said. “But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”

Durable goods orders fell 4.5% in January, according to the Census Bureau. Excluding transportation, durable goods orders rose 0.7%. Core Capital Goods orders (a proxy for corporate capital expenditures) rose 0.8%.

A record 25% of home searchers on Redfin are looking to relocate. Miami is the most popular destination from relocators. While prices have soared in many parts of Florida, they are still way cheaper than the MSAs these people are leaving, especially Coastal California and New York.

“A lot of buyers have flocked  into coastal Florida from out of town over the last several months,” said Elena Fleck, a Redfin agent in Palm Beach, which is part of the larger Miami metro area. “Buyers moving in from places like New York and San Francisco are helping the local market recover from last fall’s housing downturn. They’re not nearly as fazed by high mortgage rates because homes here are so much less expensive than their hometowns, and they get larger lots, pools, nice weather and lower taxes.”

Lending Club announced earnings. Mortgage revenue was down over 50% compared to a year ago and profit fell 52%. Home equity products accounted for more revenue than traditional mortgage purchase and refis.

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