The seasonally adjusted new home sales pace of 384K in March is 14.5% below that of February and 13.3% lower than a year ago. It's the slowest pace since July, and 14.5% is the 3rd-largest decline in 20 years. The median sales price of $290K is up 12.6% Y/Y. The supply of new homes on the market is 6 months at the current sales pace, up from 5 months in February.
Refinance applications fell 4% last week, while applications for home purchases fell 3% and are now off 18% Y/Y. Refinance apps now make up about half of all mortgage volume, down from over 80% when rates were at record lows in 2012 and early 2013.
The average loan size continues to rise, this week reaching its highest level ever of $280,500. This coincides with a big rise in home prices, a surge in sales of more expensive homes, and the inability of first-time homebuyers to either get a mortgage or compete with the likes of Wall Street's all-cash buyers on the cheaper end of the market.
March's existing home sales volume of 4.59M was 7.5% below last year's pace and the slowest volume since July 2012. The NAR's Larry Yun sounds frustrated: “There really should be stronger levels of home sales given our population growth."
The median price of $198,500 is up 7.9% from a year ago. Distressed sales accounted for 14% of all sales, down from 21% a year ago. Inventory rose 4.7% to 1.99M homes - a 5.2 month supply at the current sales pace, up from 5.0 months in February.
All-cash sales accounted for 33% of all deals vs. 35% in February, 30% a year ago. Individual investors purchased 17% of homes, vs. 21% in February, 19% a year ago. Seventy-one percent of investors paid cash in March.
Warming up along with the weather, the Philadelphia Fed Index jumps to a 7-month high of 16.6 from 9.0 previously. New Orders rose to 14.8 from 5.7, Shipments to 22.7 from 5.7. Delivery Times dive to -14.3 from -2.7, meaning times got far shorter - typically a sign of economic weakness, but this time maybe just melting snow?
One weak sign from the report: The six-month outlook slumps to 26.6 from 35.4.
The Bloomberg Consumer Comfort Index rises to -29.1 from -31.9, reflecting a board recovery among most income groups. The weekly gauge had been on a downtrend along with temperatures during the mid-to-late winter.
Reports from the 12 Federal Reserve Districts suggest economic activity increased in most regions of the U.S. since the previous report, with consumer spending increasing as weather conditions improved, according to the latest Beige Book.
10 of the 12 districts saw improvement - mostly to "modest to moderate" - but activity declined in the Cleveland and St. Louis regions.
Manufacturing improved in most districts, reports on residential housing markets varied.
Stocks are little changed; 10-year Treasury yield +1.5 bps at 2.641%.
Overshooting can be costly, says Janet Yellen - now in Q&A following her speech - responding to a question about tightening policy. I hope it's clear, she says, that as the recovery proceeds, the Fed will need to tighten.
On a question about Europe, Yellen says the economy there is being held back by its banking sector. The lesson for U.S. banks: Further strengthening - i.e., more stringent capital requirements.
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Equities and Treasury prices are pretty much where they stood prior to Yellen taking the podium in NY.