Double whammy for housing in February…

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MBS Road Signs 3-29-21

Low temperatures and low inventory were a double whammy for housing in February, as sales of existing homes fell 6.6% while new home sales plunged 18.2% from January. However, sales of both new and existing homes were higher compared to February of last year. While bad weather certainly put a freeze on sales, the lack of supply was an even greater challenge, especially among existing homes with inventory almost 30% lower than February of last year.

Inflation was tame in February per the Fed’s favored measure, Personal Consumption Expenditures. However, inflation is expected to rise this spring – and that could impact both Mortgage Bonds and the home loan rates tied to them. Don’t miss the explanation about this below. And of immediate note, a large cargo ship is blocking the Suez Canal, which is impeding global trade and could cause some spikes in inflation.

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