Quiet Week For Mortgage Markets
With a lack of major economic news, it was a relatively quiet week for mortgage markets. Rates ended slightly lower but remain near their highest levels since May.
ISM Modest Upside Surprise
The most significant economic reportreleased last week by the Institute of Supply Management revealed a modest upside surprise. The ISM national manufacturing index rose to 49.3, a little above expectations, but this was still its ninth straight month under 50. Since readings above 50 indicate an expansion in the sector and below 50 a contraction, this report reinforces yet again that manufacturers continue to struggle.
Strong November Home Sales
In November, sales of existing homes rose 5% from October and were 6% higher than a year ago. The median existing-home price of $406,100 was up 5% from last year at this time. Inventories remain stuck at historically low levels, standing at just a 3.8-month supply nationally, far below the 6-month supply typical in a balanced market. On a brighter note, though, inventories were 18% higher than a year ago. The results were similar for sales of new homes, which increased 6% from October and were 9% higher than a year ago.
Applications Slump
While home sales posted nice gains in November, the outlook going forward might be less rosy due to higher mortgage rates. One hint came from the weakness in mortgage applications this week. According to the latest data from the Mortgage Bankers Association (MBA), applications to refinance fell 36% from the prior week but still were 10% higher than one year ago. Purchase applications dropped 13% from the prior week and were down 17% from last year at this time.
Mortgage Rates for the week of 1-6-2025