Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

MORTGAGES: RATES DIP TO MULTI-MONTH LOWS, BORROWERS UNIMPRESSED

The cost of financing home loans dipped last week, but not by enough to woo would-be borrowers, apparently.

The average 30-year contract rate USMG=ECI shaved off 5 basis points to land at 6.88%, according to the Mortgage Bankers Association (MBA).

Still, demand for loans to purchase homes USMGPI=ECI barely budged, increasing by a negligible 0.2%. Combined with a 3.6% drop in refi applications USMGR=ECI, total mortgage demand softened by 1.2%.

"Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market," writes Joel Kan, MBA's deputy chief economist "This pushed mortgage rates lower, with the 30-year fixed rate decreasing to ... the lowest rate since mid-December."

In fact, that 30-year fixed is now 16 bps cooler than the same week one year ago.

Over the same time frame, purchase and refi applications are up 13.1% and 44.6%, respectively.

So from that perspective, the housing market appears primed for a comeback:

But on aggregate, recent housing data has disappointed.

Recent readings of housing starts, existing home sales, pending home sales, and homebuilder sentiment disappointed, failing to respond to gradually easing mortgage rates and growing inventories of homes for sale.

Even so, economic data is focused on the rear view mirror.

For a gander at where investors believe the sector's headed, the stock market is a good place to start.

Over much of the past year, the chart below showed the S&P 1500 Homebuilding index .SPCOMHOME and the Philadelphia SE Housing index .HGX handily outperforming the broader market.

That relationship quickly reversed in the closing months of 2024.

The SPCOMHOME is now down around 6% compared to a year ago, while the HGX is up a modest 1% or so. The S&P 500 index, meanwhile, is up around 17.5% over the last 12 months.

(Stephen Culp)

*****

FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

AHEAD OF NVIDIA RESULTS, NASDAQ COMPOSITE ON 4-DAY LOSING STREAK - CLICK HERE

WHERE TO MAKE SPACE FOR A EUROPE OVERWEIGHT? SELL BIG TECH - CLICK HERE

EUROPEAN AUTOS: GOOD NEWS COMING INTO SIGHT - CLICK HERE

WHO KNOWS WHERE THE EURO GOES, BUY VOL? - CLICK HERE

STOXX BACK AT RECORD HIGH - CLICK HERE

EUROPE BEFORE THE BELL: RISK-ON IN EUROPE, AFTER RISK-OFF IN US - CLICK HERE

MORNING BID EUROPE: NVIDIA RESULTS OFFER WINDOW INTO AI SPENDING - CLICK HERE