Home » Home Sales Decline – Largest Decline Since 2010

Home Sales Decline – Largest Decline Since 2010

Home Sales Decline A Surprising 11%!

Over the past week, economic events have had very little effect on mortgage rates. Year-end volatility due to light trading volume has been the more significant influence. Mortgage rates ended the past week just slightly higher. 

Analysts are scratching their heads bald, thinking up reasons to explain the 10.5% drop from October—the largest month-over-month downturn since a 22.5% decline in July 2010, according to sales figures released on Tuesday by the National Association of Realtors®. What’s more, November’s sales pace was the slowest in 19 months. (Realtor.com)

The last batch of data released this year on housing activity showed that we are ending 2015 at better levels than in 2014, but below the best levels of this year. A surprising 11% drop in existing home sales in November can be, at least partially, attributed to longer closing times resulting from new closing disclosure regulations.

While existing home sales dropped sharply, NAR’s Pending Home Sales Index for November was nearly unchanged. This index measures contracts to buy existing homes which were signed during the month. This measure would not have been affected by the new regulations. Fannie Mae projects the improvement in housing activity seen in 2015 will continue in 2016 with a 3.9% increase in total homes sales.

The most recent inflation reading, the core PCE price index, showed that in November inflation remained well contained, at an annual rate of just 1.3%. Both low commodity prices and a stronger dollar have helped keep inflation low in 2015. However, the effect these have on inflation is transitory. Unless commodity prices continue to fall or the value of the dollar continues to rise, future readings will not reflect these benefits. The Fed’s effectiveness at keeping expectations for future inflation low will influence mortgage rates in 2016. 

 Mortgage markets will close early on Thursday and will be closed on Friday. Next week, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index and Construction Spending will be released on Monday. The ADP Employment Change, the ISM national services index, and the Minutes from the December 16 Fed meeting will come out on Wednesday. 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Homes made possible

Fill in your details and I’ll get you a free mortgage payment quote!

Read the terms and conditions HERE.

White Sun American Mortgage Logo

Got Questions?

We’d love to hear from you!

Read the terms and conditions HERE.