A Pending Home Sale is a when a contract is in place to sell a home but it has yet to close. The National Association of Realtors reported that from January 2009 to January 2010 this index increased by 12.3%. So, the year-over-year numbers show some improvement in the housing market.
However, Pending Home Sales shrank 7.6% in their monthly comparisons between December 2009 and January 2010. Home Sales traditionally pull back during the colder months. The warm, Spring air traditionally starts to heat up demand for housing and that is right around the corner.
Unemployment Rate Remains Unchanged
We had two very important measures of Unemployment last week. On Thursday, the Initial Jobless Claims data was released and showed that new claims for unemployment benefits fell by 29,000 from the previous week to a seasonally adjusted 469,000.
The Unemployment Rate was released Friday. It remained unchanged from the prior period at 9.7%. Most economists and the market expected it to increase. But two consecutive readings of 9.7% is starting to bolster the consensus view that we may have started to see the beginnings of some gradual healing and that we could be on the brink of showing some actual job creation by the next report.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +13 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Our best mortgage rates were on Thursday as we matched our best pricing levels of the year which occurred previously on 02/08/2010. However, we lost -25BPS the very next day on the relative strength of the Unemployment Report. Make sure you call me for the real story on mortgage rate movements.
MICHAEL MCDEVITT 