Updated on April 23, 2019 10:35:17 AM EDT
The Commerce Department announced late this morning that sales of newly constructed homes rose 4.5% last month, exceeding expectations. Market participants were expecting to see a decline in new home sales, indicating this part of the housing sector is stronger than many had thought. Fortunately, this is considered to be a minor release because it tracks such a small portion of all home sales in the U.S. and has had little influence on today’s mortgage pricing.
Tomorrow has no relevant economic data but does have the first of this week’s two Treasury auctions that may have an impact on mortgage rates. 5-year Treasury Notes are being sold tomorrow, followed by 7-year Notes Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours.
©Mortgage Commentary 2019