Stocks are higher this morning on optimism for a resolution in the Persian Gulf. Bonds and MBS are up.
Trump posted on Truth Social last night that he was pausing “Operation Freedom” which would use US Navy vessels to escort shipping through the Strait of Hormuz, citing “great progress” on a deal. Apparently the two sides are close on a 1 page, 14 bullet point memorandum of understanding which would re-open the Strait.
New home sales rose 7.4% MOM and 3.8% YOY to a seasonally adjusted annual rate of 682,000 units. Housing inventory was 481,000, which represents a 8.5 month supply at current levels. Buyers have the upper hand in the new home market, which was confirmed in the numbers reported by the homebuilders.
The median sales price fell 6.2% YOY to $387,400. This is below the median existing home sale price of $408,800. First time homebuyers might want to take a look at new homes. Especially if the builder can give you a 5% mortgage.
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PennyMac reported originations of $37 billion in the first quarter, an increase of 28% on a YOY basis. Gain on sale margins increased to 86 basis points from 68 bps the year before.
Job openings fell to 6.88 million in March, according to BLS. Openings in professional and business services fell 318k, however hiring increased in that sector. The quits rate increased to 2% after falling briefly to 1.9% in February.
Mortgage applications fell 4.4% last week as purchases fell 4% and refis fell 5%. “The ongoing conflict in the Middle East continues to push rates higher. Mortgage rates last week increased to their highest level in a month, with the 30-year fixed rate rising to 6.45%,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As expected, elevated rates and shrinking refinance incentives continued to weigh on activity, with refinance applications declining again from the prior week – most notably for conventional and VA loans. The refinance share of applications was the lowest since August 2025.”
