Mortgage services.

The National Association of Realtors' Pending Home Sales Index (PHSI) tracks purchase contract signings that have not yet turned into Existing Home Sales. Things haven't been going well for either sales metric for more than 2 years now--a problem that can be blamed on a combination of factors led by it's proximity to the sharpest interest rate spike in decades. That's the bad news. The good news is that things actually haven't gotten markedly worse after the initial swan dive in 2022. This, of course, means that the sales index is free to experience some ups and downs inside the broadly sideways, severely depressed range. The most recent installment amounts to a half smile on an otherwise perpetually sad face.  Well, maybe a quarter smile... According to NAR Chief Economist Lawrence Yun, "Despite the modest monthly increase, contract signings remain well below historical levels. A meaningful decline in mortgage rates would help both demand and supply—demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect." Here's a regional breakdown showing the percent change in Pending Sales from the previous month: Northeast: -0.9% Midwest:   +0.7% South:      +6.2% West:        -3.0% And now the percent change from the previous year: Northeast: -2.5% Midwest:   -4.7% South:      -3.4% West:        -3.5%

This week's update on refinance application demand accurately reflects the fact that rates came into the week near their recent highs, but managed to fall in line with recent lows several days later. The net effect for the Mortgage Bankers Associations (MBA) Refinance Index was a modest drop from last week while remaining elevated relative to the trend seen between November and late February. MBA's purchase index is far less concerned with short term rate fluctuations, and managed to move up to the best levels since early February. In addition, purchase activity is holding in the upper portion of the range that's been intact for nearly 2 years. “Purchase applications saw the strongest weekly pace in almost two months and were 7 percent higher than a year ago. Last week’s purchase activity was driven primarily by a 6 percent increase in FHA applications, as the combination of loosening housing inventory and slowly declining mortgage rates have presented this segment of buyers with more opportunities,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Additionally, VA purchase applications saw a modest increase over the week. Overall applications declined, however, as refinance applications were down 5 percent to its lowest level in a month.”

It's not uncommon for certain medications to come with warnings about avoiding certain activities like driving or operating heavy machinery due to the risk of drowsiness. But medications aren't the only causes of such sleepiness.  Just ask the latest New Home Sales report from Census Bureau! There are several ways to establish the soporific nature of this data. First off, the market is always most interested in data when it falls far from the consensus among economic forecasters. At an annual pace of 676k homes versus a median forecast of 680k, this one was about as close as they come. Perhaps more importantly, the sales count hasn't been more than 70k higher or lower than that for the past 2 years.  70k might sound like a lot, but consider that it only took a few months to see sales jump more than 400k in 2020, or that the peak to trough move during the financial crisis was over 1 million homes per year. In other words, sales may be exhibiting some month to month volatility, but they've been almost perfectly sideways, on average, for just over 2 years now. In regional terms, The Midwest and the South did all of the heavy lifting, adding 13k and 27k homes respectively.  The Northeast brought the national tally down by 6k and the West did the most damage at 22k.  The latest news release from the Census Bureau is always available here: https://www.census.gov/construction/nrs/pdf/newressales.pdf