Mortgage rates trended downward last week for the first time in several weeks. Both existing home sales and new home sales fell. Mortgage application submissions decreased for refinances but increased for purchases. Jobless claims dropped to a new pandemic low, and GDP grew. Personal income and consumer spending declined while inflation increased slightly. Consumer sentiment surged to the highest level in nearly a year.
Mortgage Rates Currently Trending
This Week's Potential Volatility
Market Recap
- Existing home sales slipped 6.6% in February, down to a seasonally adjusted annual rate of 6.22 million. The regions with the largest month-over-month drops in existing sales last month were the Midwest (down 14.4%) and the Northeast (down 11.5%) – both hard hit by February winter storms. Compared to February 2020, existing home sales were still up by 9.1%.
- New home sales declined in February as well, falling 18.2% month-over-month to a seasonally adjusted annual rate of 775,000. The Midwest – a region that struggled with the uncharacteristic weather – suffered a 37.5% drop in new sales. Year-over-year, however new sales remained high – up 8.2%
- Mortgage application submissions dropped a composite 2.5% for the week ending 3/19. The decrease was largely cause by the 5% fall of the refinance index. The purchase index, however, increased by 3%. This is the fourth consecutive week of increases for purchase application submissions, bringing their total up 26% year-over-year.
- For the week ending 3/20, initial jobless claims dropped below 700,000 for the first time since COVID-19 started. Falling by nearly 100,000, initial claims totaled at 684,000 last week. Continuing claims saw a substantial drop as well during the week ending 3/13 – down 250,000 from the week before to total at 3.87 million.
- GDP increased to 4.3% in the fourth quarter of 2020 – showing strong signs of economic improvement. The largest changes in the fourth quarter GDP report were the business investments – specifically business investments in intellectual property, inventories, and residential housing.
- In February, personal income decreased 7.1% and consumer spending dropped 1%. Inflation inched up 0.1% month-over-month and 1.4% year-over-year. The economy is forecast to grow by as much as 7.5% this coming quarter.
- Consumer sentiment grew much larger than expected, reaching 84.9 in March. This 10.5% monthly gain marks the highest level of consumer sentiment in nearly a year.
Market Forecast
This week’s important economic reports include:
- FHFA home price index
- Case-Shiller home price index
- Consumer confidence
- Mortgage applications
- ADP employment
- Pending home sales
- Jobless claims
- Construction spending
- Nonfarm payrolls
- Private payrolls
- Manufacturing payrolls
- Unemployment rate
- Participation rate
- Average hourly earnings
- Average workweek
Economic Calendar Outlook
Week of March 29th, 2021
