While my May Market Forces post indicated I expected higher rates, we are bumping up against the resistance levels set in January. Today’s housing data gave a push to rates but neither my previous forecast nor the new housing sales affects my belief that rates are going higher. That decision is based upon many other factors than the upward momentum in rates this month or one economic report. Specifically, I find minimal value in looking at the 16% jump from the previous month.

Springtime is usually strong for home sales and it’s tough to know how much of the 11% decline in prices affected this increase in unit sales. I don’t put much credence in the argument that April’s new home sales justifies an increase in rates and I also do not believe it means that the housing and mortgage crisis is over. Fortunately, these things are much too complex and require a lot more data over multiple months. The average and trend is much more important and right now, that is still showing a weakness in housing. It’s tough to catch a falling house and I don’t advocate trying to do it.