Mortgage Rates worsened this week as the price of oil and inflation indices continue to climb. Rates are down 0.25% from this time last year.
Fed Chair – Kevin Warsh returns to the board after a 16-year hiatus. He was confirmed as the new Fed Chair late last month and had his first day in office yesterday. Warsh is considered more of a Hawk then his centrist predecessor, we will see how that plays out in the Fed’s monetary policy and he enters an environment of somewhat persistent inflation.
Inflation – the BLS released their monthly Producer Price Index which showed a 1.4% increase in inflation over the past month fueled by a 16% rise in gasoline prices. The Core rate, which strips out food and energy prices, rose 1%, more than three times the estimates of 0.3%. Year over year core inflation is up from 4% to 5.2%
Home Sales – NAR released their monthly Existing Home Sales report which showed that closings on existing homes in April were up a slight 0.2% to an annualized pace of 4.02M. Sales are flat year over year. Inventory is at 4.4 months, which is slightly lower than a balanced market of4.6 months. The median home price rose 2.1% last month and roughly 1% year over year to $417,700. First time homebuyers accounted for 33% of sales, cash buyers made up 25% of transactions, and investors accounted for 16% of purchases.
Mortgage Applications – to purchase homes rose 4% lasty week and are up 7% year over year. Refinances fell 1% and are up 28% year over year.