The economic data released this week had little impact on mortgage rates. Tuesday's Bank of Japan meeting also caused little reaction in U.S. markets. Mortgage rates ended the week lower.
While it had little market impact, Wednesday's report on sales of previously owned homes exceeded expectations and reached another multi-year high. November existing home sales increased a little from October to the highest level since February 2007. Existing home sales were 15% higher than a year ago.
This figure is inflated somewhat, though, since sales in November of last year were depressed by the implementation of new closing disclosure requirements. Total inventory of existing homes available for sale fell to a 4-month supply, and it was 9% lower than a year ago. The median existing-home price was 7% higher than a year ago. Since sales of previously owned homes measure closings, the November data was not affected much by the increase in mortgage rates seen since the election.
Thursday's report on orders for durable goods contained mixed news. Durable goods are products which are expected to last more than three years. The overall figure revealed that orders for durable goods in November declined 4.6% from October, which was close to the expected levels. The decline was mostly due to a drop in aircraft orders. Since certain products such as aircraft tend to be very volatile from month to month, investors generally prefer to look at a core reading to get a better sense of the underlying trend. This core indicator of business investment, nondefense capital goods excluding aircraft, showed a healthy increase of 0.9% from October.
Looking ahead, it will be a light week for economic data. Pending Home Sales will come out on Wednesday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. During the last couple of weeks in December, trading volume tends to be lighter than usual, which can lead to exaggerated price swings. Mortgage markets will be closed on Monday in observance of Christmas.
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