Today Citi and some other banks quoted the 30-year conforming mortgage rate at 4.625%. Others are quoting the rate even higher (see national averages below).
|Source: Mortgage News Daily|
Once again, it's a low rate by historical standards, making many economists think that the housing sector is unlikely to be impacted. The markets say otherwise. Over the past three months, the Philadelphia Housing Index has underperformed the S&P500 by 9%.
For the first time in a while, US homebuilders are becoming concerned. While sales expectations continue to be strong (given demographics-driven housing demand), the ISI Homebuilders Sales Survey turned down in recent weeks.
|Source: The ISI Group|
These higher rates may already be showing up in the employment numbers. In spite of the strong US employment report today, on a seasonally adjusted basis almost no new jobs have been created in residential construction in June (chart below).
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