Happy Friday, Brian Manning here at the weekly update. Let’s get right to it. Monday this week. pretty quiet news day, not much to talk there. Tuesday this week we got Case Shiller. Case Shiller gives us a report every month on housing appreciation across the nation. And on a year over year basis, home appreciation is up 13.2% which is a crazy number. The question is really, is this number too much, right? We kind of feel like the Goldilocks number for appreciation is like 5%, 13.2% is not sustainable. It has to come down sometime. I don’t really know when but 13.2% is just a ridiculous number.
Wednesday of this week, quiet newsday, Thursday of this week, we get pending home sales. Pending home sales on a month over month basis were down 4.4%. National Association of Realtors says it’s primarily due to a lack of inventory. I actually very much agree with this, because looking at our market here, and just across the nation, inventory is still at an all time low. And then also today, we get the personal consumption expenditure. This is the PCE, the Federal Reserve’s favorite gauge for measuring inflation. And if we look at the headline number on a month over month basis, the PCE was up 6/10%, which is a hot number. And on a year over year basis, up 3.6%. If we look at what’s called the core rate, so the core rate of inflation strips out volatile items, such as food and energy, on a month over month basis, this was up 7/10%, on a year over year basis up 3.1%. So certainly we’re seeing inflation run hot right now, you know, if we looked at just the month over month number and ignored the year over year, right? I say ignore the year over year only for right now, because we compare it to this time last year, and we have 2020’s numbers into this equation, we were in lock down, so there wasn’t really a lot of spending taking place. But month over month, 7/10% is a hot number. So we have to wait and see what happens here. Is a transitory? Is only going to last through the fall? And then taper off, I’m really not sure, we’ll have to wait and see.
One thing I want to look at real quick is just the charts here and get a feel for what’s happening in the market. So what I always look at here is the yield on the 10 year Treasury because mortgage rates typically go kind of in suit with what the yield is doing. What’s interesting to see is, you know, we slowly saw mortgage rates rise from January through middle of March, and then from mid-March to today, we’ve kind of just traded in this tight range. What’s interesting to see though, is if you look at today, you know, we don’t really see a negative impact.
Usually when you get hot inflationary reports like we got today they have more of an impact on the bond markets, but today the markets are kind of taking a stride and just digesting it. So it’s interesting to see right now that we’re not seeing any kind of movement in mortgage rates based off the inflationary data.I’m not complaining it’s actually really good to see. Rates are still at amazing all time lows, and we’re certainly helping people buy homes and refinance ridiculous interest rates.
Also, I can’t believe it’s the kick off of summer, Memorial Day weekend, unbelievable. Everyone that has served for our country, thank you so much for your service. We just can’t thank you enough. I’m around all weekend. If you have any questions, call me on my cell phone, text me. I’m available every single day this weekend, I’ll be around for Memorial Day as well. Hope you have a wonderful holiday weekend. Have a great day.