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Friday, June 21, 2024

S&P 500 Closes Lower as New Home Sales Disappoint

Key Takeaways:

  • The S&P 500 closed 0.31% lower on March 25, 2024, following weaker-than-expected new home sales data in the U.S.
  • New home sales in February declined by 0.3% month-over-month, missing the consensus estimate.

The S&P 500 closed 0.31% lower on Monday, March 25, 2024, following the release of weaker-than-expected new home sales data in the United States. The index ended the day at 5,218.19, down 15.99 dollars from its previous close.

New Home Sales Data

The U.S. Census Bureau reported that new home sales in February declined to -0.3% month-over-month to a seasonally adjusted annual rate of 662,000 units. This was below the consensus estimate of 675,000 units.

The new home sales data suggests that the housing market may be losing momentum, despite the recent decline in mortgage rates. The 30-year fixed mortgage rate has fallen from a peak of 7.79% in October 2023 to around 6.87% in March 2024, according to FRED. However, the high absolute level of mortgage rates and elevated home prices continue to weigh on affordability and demand.

US 30-Year Mortgage Rate

A slowdown in the housing market could impact sectors such as construction, home improvement, and consumer spending.

The Federal Reserve’s Stance

The Federal Reserve’s monetary policy stance has also been important in recent months. The central bank has been raising interest rates aggressively to combat high inflation, which has weighed on risk assets such as equities.

In its latest FOMC statement on March 20, 2024, the Fed maintained its target range for the federal funds rate at 5-1/4 to 5-1/2 percent and signaled that it does not expect to reduce rates until it has gained greater confidence that inflation is moving sustainably toward its 2% objective.

Some analysts remain optimistic about the long-term prospects for U.S. equities. They point to the resilience of the U.S. economy, the strong labor market, and the potential for a soft landing as the Fed prepares to lower rates.

Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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