On a positive note, existing home sales jumped in March to the fastest pace in 18 months, according to the National Association of Realtors. Sales rose 6.1% to an annual rate of 5.19 million, marking the highest level since September 2013. “After a quiet start to the year, sales activity picked up greatly throughout the country in March,” he said. “The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.”, according to the NAR chief economist. March’s inventory of 2 million existing homes for sale equals a 4.6 month supply at the current sales pace.
Meanwhile, sales of new homes pulled back from a seven-year high last month, dropping 11.4% to an annual rate of 481,000, the slowest pace since November.
Orders for durable goods rose 4% in March, though that was driven almost entirely by increased demand for autos, military hardware and commercial aircraft. At the same time, a measure of business investment slipped .5%, falling for the seventh straight month.
Almost two weeks ago, the Department of Labor proposed its highly anticipated rule that would require brokers working with retirement accounts to act in the best interest of their clients (this rule was originally proposed in 2010 and was withdrawn in 2011 amid angry pushback from the brokerage industry). While the rule would require brokers to disclose any conflicts, it would allow firms to set their own compensation models, so brokers would still receive commissions: “Advisers can have considerable flexibility in how they get paid as long as they put their clients’ best interest above their self interest. The rule is intended to provide guardrails but not straightjackets”, according to the DOL. This week, more than a dozen financial industry groups wrote a joint letter to the DOL to request an additional 45 days beyond the standard 75-day comment period to respond to the rule. Trade groups argued that 75 days is not long enough to consider the “far-reaching modifications” and that “the industry will require time to assess its ability to comply “. An extra 45 days will “increase the possibility for a more workable final rule that would benefit all parties”. In other words, Wall Street is ready to dig its heels in like it did in 2011.
With April 15th behind us, an interesting infographic on tax refunds and payday loans (1 in 6 payday loan borrowers has to use a tax refund to pay down the debt, and 1 in 5 auto title borrowers has used a tax refund to pay, according to The Pew Charitable Trusts):