The Mortgage Bankers Association's weekly survey showed purchase loan applications UP 1% from the week before, refinance applications UP 6%, and Austin mortgage rates at record low levels
Generally weaker than expected economic data again pushed Austin mortgage rates to new lows this week. The current Fed outlook is for below average economic growth with low inflation, which is a favorable environment for low Austin mortgage rates.
Last week began nicely with June New Home Sales UP 23.6% to an annual rate of 330,000, well ahead of expectations. This was a sharp rebound from May when New Home Sales sank to record lows not seen since 1963. This volatility of course is all about the homebuyer tax credit (requiring a contract by April 30 and a closing by June 30, now extended to September 30). Consequently, new homes sold at a 422,000 pace in April, fell to a 267,000 pace in May, then went to 330,000 in June.
Tuesday, June Housing Starts came in down 5.0% from May to a 549,000 annual rate. This was below expectations, but still up 15.1% from the low they hit in April 2009. Most of the drop came from volatile multi-family starts. Single-family starts were down a mere 0.7%. Most significantly, housing completions shot up 26.2% in June, the biggest monthly gain going back to the late 1960's. Builders clearly shifted focus from starting to finishing, as they pushed to close sales qualifying for the homebuyer tax credit. Finally, Building Permits were UP 2.1% for June, beating expectations, so things are looking up for the months ahead.
Last Thursday pending home sales, a measure of contracts signed for existing homes, were reported off 30% in May compared to the prior month. This of course was simply the result of the end of the homebuyer tax credit, which required a signed contract by April 30. Common sense tells us many of those April contracts would have happened in May or even later if it weren't for the pressure to qualify for the tax credit.
After dropping to the lowest level in decades last week, Austin mortgage rates fell even further this week. Weak economic data from the United States, China and Europe caused investors to question the pace of the global economic recovery.
Global economic news influenced United States mortgage markets this week. While the domestic data released during the week was mixed, an improved economic outlook in many other countries was unfavorable for bond markets. As a result, Austin mortgage rates ended the week a little higher.
Last Tuesday April Housing Starts were UP 5.8% at an annual rate of 672,000 units. This puts them UP 40.9% over a year ago, with single-family starts UP 10.2% for the month. April New Building Permits were off 11.5%, at an annual rate of 606,000. Some said these stats reflect builders' response to the expiration of the homebuyer tax credit. Nevertheless, housing has turned the corner....
Last Tuesday the National Association of Realtors reported pending home sales were UP 5.3% in March over February, and UP 21.1% over March of last year. This gain in contracts on existing homes, following February's 8.3% rise, indicates a nice boost should be coming in existing home sales for April. Buyers who signed contracts before the end of March now have till the end of June to qualify for their homebuyer tax credit.
While inflation remained low, stronger than expected economic data released this week was negative for mortgage markets. As a result, Austin mortgage rates ended the week a little higher.