FRM Update

May 29, 2018



MBS yield spreads versus Treasuries widened slightly, as Treasury yields fell across the curve.  Mortgage rates fell significantly last week, reversing the trend higher this year.  Mortgage applications fell for the fifth consecutive week, as both purchase and refinance applications declined.  Refinance activity continues to be historically low and range-bound, falling to the lowest level in 17 years.

 

MBS

 




 

CMOs

 

 

Mortgage Rates and Refinance Activity

 

 

 

 

Housing: 

Existing Home Sales Slowed in April: Sales dropped 2.5% MoM in April, a steeper decline than the 0.9% decrease expected by economists.  Despite a seasonal uptick in inventories relative to March levels, available inventory tightened on a YoY basis for the 35th consecutive month. The confluence of those two factors was a higher median sales price of $257.9MM, 5.3% higher than a year ago and the third highest on record.

Momentum of New Home Sales Slows After April’s Data and Revisions: New home sales totaled 662k annualized units in April, short of the 680k pace expected, and the prior three months’ tally was revised down a total of 41k. The 1.5% MoM decline in April was driven entirely by a 7.9% decline in the West, which accounted for just over a quarter of the total month’s sales. Activity in the Midwest and South was essentially flat while sales in the Northeast, the region with the smallest volume, jumped 11.1% after declining 16.3% in March. While the general uptrend remains intact, the momentum to start 2018 looks slower than expected.

 

 

 


Dan Stimpson, CPA

Senior Vice President

Vining Sparks

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