Thursday, April 22, 2021


Updated on April 22, 2021 10:05:43 AM EDT

This morning’s first piece of economic data was last week’s unemployment figures that showed 547,000 new claims for benefits were filed. That fell short of the 600,000 that was expected and was down from the previous week’s revised 586,000 initial filings. It also was the lowest number since the pandemic started. Declining claims is a sign that the employment sector strengthened during the week, making the data bad news for bonds and mortgage rates. Fortunately, this is only a weekly update that has lost some of its influence it had during the height of the pandemic, minimizing the negative impact on this morning’s rates.

Marchs Existing Homes Sales was the second report of the day, coming at 10:00 AM ET. The National Association of Realtors announced a 3.7% decline in resales of existing homes. Analysts were expecting to see a smaller decline in sales, meaning the housing sector was a bit softer than thought last month. Accordingly, we can label this release favorable for mortgage rates.

Also posted late this morning was Leading Economic Indicators (LEI) for March. They revealed a 1.3% increase that greatly exceeded forecasts of 0.6%. In other words, the indicators are pointing towards stronger than expected economic activity over the next several months. Since bonds and mortgage rates tend to thrive in weaker economic conditions, we should consider this report bed news.

Tomorrow has a single release to close out this week’s calendar. Marchs New Home Sales numbers will be posted at 10:00 AM ET, giving us another measure of housing sector strength. This Commerce Department report tracks a much smaller portion of all home sales than today’s report did, so it is considered to be of low importance to the markets. Market participants are forecasting a large increase in sales of newly constructed homes. Favorable news would be a decline, but unless there is a significant variance from forecasts, the data will likely have little influence on rates.

 ©Mortgage Commentary 2021