Buy-Now Pay-Later – in 2 months the CFPB will treat buy-now pay-later companies as credit card providers under the Truth and Lending Act. While this will not force BNPL companies to report to credit bureaus, the 1 in 5 households that utilize these plans will have methods of disputing charges particularly for items that never arrived or arrived damaged.
Mortgage Rates increased marginally this week as the price of Mortgaged Backed Securities (MBS) declined in response to strong economic data. Rates are up approximately 0.25% from this time last year. The bond market will be closed Monday for the holiday.
Manufacturing–The S&P Global Composite index rose from 51.3- 54.4, 3 pts hotter than estimates. Even though US Manufacturing has been weak, global manufacturing is showing expansion.
New Home Sales – which measures signed contracts on new homes, fell 4.7% in April to a 634,000 annualized pace. Estimates were suggesting gains for April. New home sales are down 7.7% year over year. Of completed new homes that are available for sale there is 1.85 months of supply (up from 1.64 in March). The median price of a new home is $433,500, a decline of 3.9% year over year. This doesn’t necessarily indicate home values are declining but it does show that lower priced homes are being built.
Existing Home Sales, which measures closings on existing homes, fell 1.9% in April to an annualized pace of 4.14M units, which is slightly worse than expected. Sales are down 1.9% year over year. This moderation isn’t terrible when factoring the rise of Mortgage rates from February to April. Inventory increased 9% month over month to 1.21M units to a supply of 3.5 months (4.6m is considered a ‘normal’ market). The median price on an existing home was $407,600 up 5.7% year over year. For homes priced above $1M inventory increased 34% year over year and sales increased 40% in that time period. Homes are averaging 26 days on market. First-time homebuyers accounted for 33% of sales while cash buyers accounted for 28% and investors accounted for 16%.
Single Family Rents – CoreLogic released their rental report for March and it showed that rents declined 0.6% year over year, the first negative reading in 14 years. It is worth noting that within this report detached rent prices remained up 3.4% year over year. Even though the rents are an important part of inflation indexes this likely won’t make a major change in inflation readings as when you combine the last 3 months of reports you get an annualized increase of 5.2%.
Mortgage Applications to purchase homes decreased 1% last week and are down 11% from this time last year. Refinances rose 7% last week and are up 21% year over year.