It was an uneventful week for the data reports, as the majority of the interest waits for the Federal Reserve’s rate decision heading into the following week. One of the most notable reports is for New Home Sales, which had managed to greatly exceed the projections for the end of the year moving into January. It is an early sign that there is a surge in response to the week-to-week rate cuts we have been observing over the last two weeks.
The second largest data reports come from the PCE Index and preliminary projections for the Q1 GDP statistics. It is expected that the Federal Reserve’s decision to hold the current rate will hold true, but there is some optimism that a small rate cut may be a possibility.
Pending Home Sales
U.S. pending home sales shot up in December as falling mortgage rates brought buyers back into the market.
Pending home sales rose 8.3% in December from the previous month, according to the monthly index released Friday by the National Association of REALTORS®.
GDP (Prelim)
The U.S. grew at a robust 3.3% annual pace in the fourth quarter, showcasing the economy’s remarkable vigor despite high interest rates and still-elevated inflation. The Forecast of Growth was projected to be 2.0%.
Although growth slowed from the third-quarter’s surprising 4.9% clip, the back-to-back readings were the strongest since 2014, if the sharp recovery after the pandemic is set aside.
PCE Index
The rate of U.S. inflation — based on the Federal Reserve’s preferred PCE gauge — rose a mild 0.2% in December and pointed to smaller price increases in 2024.
Inflation picked up a bit at year end after declining in November, but there’s little evidence of emerging trouble. The increase in prices in the 12 months ended in December was unchanged at 2.6%.
Primary Mortgage Market Survey Index
• 15-Yr FRM rates are seeing an increase by 0.20%, with the current rate at 5.96%
• 30-Yr FRM rates are seeing an increase by 0.09%, with the current rate at 6.69%
MND Rate Index
• 30-Yr FHA rates are seeing a 0.05% increase for this week. Current rates at 6.20%
• 30-Yr VA rates are seeing a 0.08% increase for this week. Current rates at 6.25%
Jobless Claims
Initial Claims were reported to be 214,000 compared to the expected claims of 200,000. The prior week landed at 189,000.
What’s Ahead
All sights are set for the Federal Reserve’s rate decision coming next week. There are other notable reports alongside the rate decision including Non-farm Payroll statistics, Consumer Reports (Univ. Michigan), PMI numbers, and Shiller Price Home Index statistics, first reports of the year.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.