Stocks are mixed and Mortgage Bonds are higher to start the day.
Case-Shiller and FHFA Appreciation Reports for January
The Case-Shiller Home Price Index, which is the “gold standard” for appreciation, showed that home prices rose 0.6% in January on a seasonally adjusted basis. The raw figure was +0.1%, but because this is a weaker time of year for housing, it is always seasonally adjusted higher.
Year over year, home prices rose to 4.1% from 4%.
The Federal Housing Finance Agency (FHFA) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. Different than Case-Shiller, it does not include cash buyers or jumbo loans. The FHFA reported that home prices rose 0.2% in January after seasonal adjustments. Year over year, home prices are up 4.8%, which is stronger than the 4.7% in the previous report.
Bottom line: Home prices are continuing to move higher and are rising around 4% year over year, which is solid home price appreciation.
New Home Sales
New Home Sales, which measures signed contracts on new homes, rose 1.8% to a 676,000-unit annualized pace, which was 1,000 lower than estimates. There was an upward revision of 7,000 in January. Sales are up 5.1% year over year.
The median home price was reported at $414,500, which is down 3% from January and 1.5% year over year. This is skewed lower due to the decrease in sales caused by harsh weather in the NE, where homes are more expensive.
There were 500,000 new homes for sale at the end of February and based on the pace of sales, there is an 8.9 months’ supply, which is down from 9 months.
However, only 119,000 homes were completed while 102,000 had not even been started and some may not even happen. When looking at pace of sales versus homes that are completed, the months’ supply declines to 1.7 and is much tighter.
News This Week
Tomorrow: GDPNow (1Q), Mortgage Apps, Durable Goods Orders
Thursday: Q4 GDP (Final reading), Initial Jobless Claims, Pending Home Sales
Friday: Personal Consumption Expenditures (PCE)
Technical Analysis
Mortgage Bonds are challenging the dual ceiling comprised of the 101.39 Fibonacci Level and the 25-day Moving Average. If MBS can breach these levels, there is room for improvement before reaching the next ceiling at 101.71.
After breaking into a new range yesterday between a floor at the 4.332% Fibonacci Level and a ceiling at the 100-day Moving Average, Yields are currently back testing the aforementioned Fibonacci Level.
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