|Homeowners’ real estate holdings minus the change in mortgage debt rose by $320.1 billion (a positive number means that the value of real estate is growing at a faster pace than household mortgage debt). That and other statistical findings were revealed in the latest Flow of Funds report published by the Federal Reserve.
Their report revealed that with $122.7 trillion in assets and a modest $15.7 trillion in liabilities, the net worth of US households rose to an all time high $106.9 trillion, increasing for 11 consecutive quarters and up $2.2 trillion as a result of an estimated $559 billion increase in real estate values, as well as a $1.7 trillion increase in various financial assets like corporate equities, mutual and pension funds, and deposits as the stock market soared to just shy of new all time highs.
In a separate report, the recent Existing Home Sales report published by the National Association of Realtors showed that August Existing Home Sales were right inline with estimates, hitting 5.34M vs estimates of 5.35M. July remained at 5.34M. Available inventory remained at 4.3 months of supply and the median sales price rose for the 78th straight month and is now $264,800.
The data from the Federal Reserve and the National Association of Realtors both show that owning a home is a great investment.
Source: Federal Reserve
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.50 MBS) lost -17 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move higher for the week. It was the fourth straight week of higher rates.
Overview: We had a very light week for economic data, with the nothing on the calendar that could impact rates. It was the “Trade War” that got all of the market attention. MBS sold off (rates moved higher) on the prospect of higher consumer prices as a result of the latest rounds of tariffs announced by both the United States and China.
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.