Home Sales Decline

This week, the unemployment figures continued to rise and the home sales data reflected the slowdown in economic activity due to the coronavirus. Congress passed a bill to provide another $484 billion in aid for small businesses, hospitals, and virus testing. Daily volatility in mortgage markets remained low, and the change in rates for the week again was small.

Filings for new Jobless Claims dropped from 5.2 million last week to 4.4 million this week, which was close to expectations. Typical readings before the outbreak were around 250,000. The US has lost 26.5 million workers, more than 16% of the labor force, over the past five weeks.

The housing market had been performing very well prior to the outbreak of the pandemic. In February, existing home sales climbed to the highest level in more than a decade. In March, however, sales of existing homes fell 9%. The chief economist of the NAR said to expect "more temporary interruptions" to home sales in the next couple of months.

National median existing-home prices were up 8% from a year ago. Inventory levels remained low in many regions, as the number of homes for sale was at just a 3.4-month supply nationally, well below the 6.0-month supply which is considered a healthy balance between buyers and sellers.

Looking ahead, the coronavirus will remain the main focus. Investors will be watching for news about medical advances, Fed actions, government fiscal stimulus programs, and plans for reopening the economy. Beyond that, the next US Fed meeting will take place on Wednesday and the next European Central Bank meeting on Thursday. Investors will be looking at the assessment of the central banks on the economic impact of the pandemic. First quarter GDP, the broadest measure of economic growth, will be released on Wednesday and ISM Manufacturing on Friday.