Over the past week, light trading volume caused a little intraday volatility for mortgage rates, but overall it was a relatively quiet week. Mortgage rates ended the week with little change.
On Tuesday, an index from the Conference Board revealed an increase in consumer confidence in December to the highest level since 2001. The Conference Board surveys consumers about their views on present conditions and their outlook for the future in areas such as the economy, the labor market and incomes. The December increase was entirely due to improved expectations for future economic conditions.
The Conference Board’s report was consistent with recent readings on overall sentiment from other sources. In December, home builders also expressed much greater optimism for the future. According to the providers of the surveys, the improvement in the outlook among consumers and home builders is due to expected policy changes under the Trump administration. This is favorable news for home sales next year as confident consumers are more likely to make major purchases such as a home, and confident home builders should add to the inventory of homes available for sale.
On a less positive note, Wednesday’s data on contracts signed in November to buy previously owned homes fell a little from October. The election likely had an effect in this area, too. Whether the drop was due to the resulting rise in mortgage rates or the uncertainty surrounding the election, the answer should become clearer in the months ahead.
Source: MBS Quoteline