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Friday, June 24th, 2016
The initial polls on the British vote on whether to leave the European Union were negative for mortgage rates. The economic data released over the past week came in close to expectations and had little impact. Fed Chair Janet Yellen’s testimony to Congress also had little effect. As a result, mortgage rates ended the week a little higher.
The key “Brexit” vote to decide if the UK will exit the European Union (EU) took place on Thursday, but daily volatility in U.S. mortgage rates was seen during the week as new polling data became available. The vote to leave and the economic uncertainty that will follow has resulted in some investors shifting to relatively safer assets, including U.S. mortgage-backed securities (MBS), which has been good for mortgage rates.
The recent housing data was encouraging. May sales of previously owned homes increased a little from April to the highest level since February 2007. Previously owned home sales were 5% higher than a year ago. Total inventory of previously owned homes available for sale rose slightly in May, but the current low levels remain an obstacle to home sales and have pushed up home prices. The median previously owned home price was 5% higher than a year ago, at the highest level on record. Properties stayed on the market for an average of just 32 days in May, the lowest level on record. Low mortgage rates and a solid labor market have helped offset low inventory levels to boost home sales.
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