Inflation pressures have been easing since hitting a cyclical high two years ago this month. Today, the Fed’s favorite inflation gauge, the Core PCE, fell to 2.8% year over year, down from the multi-decade high of 5.57% hit back in February of 2022. The markets breathed a sigh of relief after the data was released, but MBS have remained largely flat throughout the day. I too am breathing a sigh of relief.
The volume of Pending Home Sales, which is signed contracts on existing homes which haven’t closed yet, decreased by 4.9% in January. That’s worse than expectations of a 1% gain. Year over year, pending home sales are down 8.8%, a significantly lower than the 1.3% gain in the previous monthly report. To clarify, volume is down, not values. Because everything I write is committed to memory, I’m sure you’ll remember from a few days ago that home values have risen around 6% over the last 12 months.
