Source: Barron’s —
The normally-busy spring home buying season is in its early days—but what lies in the coming months will look much different than last spring. A raft of recent housing data gives investors clues on what could happen next, but the number to watch is still mortgage rates.
Housing market data released this month showed hopeful signs of buyer demand picking up ahead of the normally busy spring season. Then mortgage rates rose.
First, builder confidence measured by the National Association of Home Builders increased for the second month in a row. Next, the National Association of Realtors said seasonally-adjusted existing-home sales in January fell by 0.7%—a smaller decline than recent drops that “may be suggesting that the home sales are bottoming out,” Lawrence Yun, the trade group’s chief economist, said on a Tuesday conference call. Finally, the Census Bureau said the seasonally-adjusted annual rate of new home sales, a measure of contract signings, increased in January by 7.2%.
Such data would paint an optimistic picture of the housing market gearing up for the spring home buying season—if not for recent gains in mortgage rates, which weekly data show may have weighed on home buyers in recent weeks.
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