Shelter Six:  May Pending Home Sales Jump a Record 44.3%

July 6, 2020 by · Leave a Comment 

May Pending Home Sales increased an astounding 44.3%, representing the greatest single month increase since NAR started tracking this metric in 2001.

For the second straight month, Employment figures far exceeded expectations. Against a consensus forecast of 3M, the economy added 4.8M jobs in June.

The Unemployment Rate declined from 13.3% to 11.1%. Average hourly earnings were 5% higher than a year ago but down 6.7% from last month.

The ISM National Manufacturing Index unexpectedly jumped from 43.1 to 52.6, the highest level since April 2019 and significant because readings above 50 indicate expansion.

The weekly forbearance survey from the Mortgage Bankers Association showed that the total number of loans in forbearance decreased for the second straight week to 8.48%.

When rental income is being used to qualify, additional reserves now must be shown.  Rental income from an investment property being purchased can’t be used at all, nor can Airbnb income.

Rate Update

Despite the release of strong economic data, last week was a quiet holiday week for the mortgage markets and 30-year rates continue to hover around 3%.

This Week

The ISM National Services Index will be released on Monday. Beyond that, investors will continue to watch for news about medical advances, government stimulus programs, and plans for reopening the economy.