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April 14th, 2014
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What Home Buyers Need to Know for the Week of April 14, 2014

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Little housing-related news was released last week’s, but that doesn’t mean we aren’t seeing signs of an improving economic picture. Labor statistics were stronger, with job openings up and new jobless claims filed lower than expected. Mortgage rates fell, and Consumer Sentiment Index was higher than expected.

The Bureau of Labor Statistics (BLS) reported that February job openings rose to 4.20 million, which exceeded January’s reading of 3.9 million jobs. New jobless claims were lower than expected with 300,000 new jobless claims filed against expectations of 316,000 new jobless claims and the prior week’s reading of 332,000 new jobless claims filed.

The Federal Open Market Committee (FOMC) of the Federal Reserve released its minutes of March 18th. The minutes noted that payroll jobs expanded, but the unemployment rate remained elevated, and inflation was below the committee’s goal of 2.00 percent with Indications of longer-run inflation expectations to be stable. Late into last year and well in to the first quarter, severe winter weather was viewed as a cause for slowing economic activity. The FOMC noted that it would be difficult to determine the effects of winter weather on the economy as opposed to slower economic growth caused by unemployment or other negative factors. Housing Starts and Building Permits were lower, but FOMC noted the impact of winter weather on these reports as well. FOMC further asserted its intention to continue reducing its monthly asset purchases by $10 billion per month as economic conditions permit. The FOMC emphasized its commitment to continuous review of financial and economic news as it makes month-to-month decisions concerning asset purchases.

Freddie Mac reported lower average mortgage rates last week. The rate for a 30-year fixed rate mortgage fell from 4.41 to 4.34 percent. The rate for a 15-year fixed rate mortgage dropped from 3.47 to 3.38 percent, and the rate for a 5/1 adjustable rate mortgage fell by three basis points from 3.12 percent to 3.09 percent. Discount points were unchanged at 0.70, 0.60 and 0.50 percent respectively. Lower mortgage rates may encourage more buyers into the market as the spring and summer buying season gets under way.

The University of Michigan’s Consumer Sentiment Index for April rose to 82.60 percent against the March reading of 80.00 percent and the projected reading of 80.80 percent.

Whats Ahead for the Week?

This week’s economic news effecting housing include Retail Sales for March, the Consumer Price Index and the National Association of Home Builders Index. Fed Chair Janet Yellen is set to give a speech in New York on Wednesday and the Fed Beige Book report will also be released.

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April 7th, 2014
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What Home Buyers Need to Know for the Week of April 7, 2014

Guy looking up in colorLast week’s economic news affecting home buyers included February’s Construction Spending and several employment reports. Private sector employment was higher in March; however The Bureau of Labor Statistics reported that Non-Farm Payrolls for March fell short of expectations.  ADP’s Payroll Report for March was higher than February’s reading, as 191,000 new private sector jobs added. In February, 178,000 jobs were added. February’s reading before being revised showed 138,000 new jobs added. Analysts are now showing confidence that private-sector employment is showing signs of stability. 

January and February’s private-sector jobs were both revised upward. January’s job gains were revised from 129,000 to 144,000 and February’s reading was revised from 175,000 to 197,000 jobs added, with revised readings representing a total of 37,000 more jobs. 

While readings on employment have been up and down in recent months, the national unemployment rate has remained relatively steady.  Last week’s reading was at 6.70 percent. 503,000 workers recently joined the workforce. This increased the labor participation rate for March from 63 percent to 63.20 percent. 

According to Freddie Mac, mortgage rates ticked upward. The average rate for a 30-year fixed rate mortgage increased by one basis point to 4.41 percent; discount points moved from 0.60 percent to 0.70 percent. The average rate for a 15-year fixed rate mortgage rose by five basis points to 3.47 percent with discount points unchanged at 0.60 percent. 5/1 adjustable rate mortgages had an average rate of 3.12 percent, which was two basis points higher than the previous week. Discount points for 5/1 adjustable rate mortgages were unchanged at 0.50 percent. 

What’s Ahead for the Week? 

Job Openings for February, FOMC Minutes and the University of Michigan Consumer Confidence Index for March will be out this week. Freddie Mac will post results of its latest Primary Mortgage Market Survey and Weekly Unemployment Claims will also be reported.

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March 31st, 2014
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What Home Buyers Need to Know for the Week of March 31, 2014

Guy looking up in colorLast week’s economic news includes several reports on the housing markets; S&P Case-Shiller 10 and 20 city housing market indices; FHFA House Price Index and Pending Sales of Existing Homes suggest that the national housing market continues to grow, but at lower rates.

Each regional of the country’s readings varied and suggested that winter weather had a negative influence on all markets. In the March 19th press conference held by Federal Reserve Chair Janet Yellen, she said that severe winter weather had interfered with the Fed’s ability to get a clear reading on economic developments. 

The Case-Shiller 10 and 20-City Home Price Indices for January showed year-over-year growth of 13.50 and 13.20 percent respectively. The 20-City Home Price Index reported that 12 of 20 cities reported slower rates of home price appreciation and posted its third consecutive month-to-month decline in home prices with a reading of -0.10 percent. The 10-City Index ticked upward, but was little changed 

Las Vegas, Nevada led cities posting gains with a month-to-month reading of +1.10 percent, but home values remain 45 percent below peak prices achieved in August 2006. David M. Blitzer, chair of the Index Committee at S&P Dow Jones Indices, noted that home prices were up 23 percent over their lows in 2012. 

The FHFA House Price Index reports home price trends for sales of homes with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. January’s data reported a year-over-year gain of 7.40 percent, which is approximately 8.0 percent below its peak in April 2007. Month-to-month home prices varied within the nine U.S. Census regions and ranged from -0.30 percent to +1.30 percent. FHFA reported that year-over-year, all nine regions reported gains in home prices that ranged from +3.20 percent in the Middle Atlantic region to 14.0 percent home price growth in the Pacific region. 

According to the U.S. Department of Commerce, February sales of new homes matched projections at 440,000 as compared to January’s revised reading of 455,000 new homes sold, which was a year-over-year high.New home sales improved by 37 percent in the Midwest, but fell in the Northeast, South and West. This suggests that while winter weather played a role, but that housing markets are cooling in general. Rising mortgage rates and concerns over new lending standards likely contributed to the drop in sales. 

Pending home sales slumped in February according to the National Association of REALTORS®. February’s index reading of 93.9 as compared to January’ index reading of 94.7 represented the eighth consecutive monthly drop for pending home sales and was the lowest reading since October 2011. Pending home sales indicate future completed sales. Lawrence Yun, the NAR’s chief economist, noted that home sales delayed by winter weather may be completed this spring. 

Freddie Mac reported that average mortgage rates rose across the board last week with the rate for a 30-year fixed rate mortgage rising eight basis points to 4.40 percent. 15-year fixed mortgage rates rose 10 basis points to 3.42 percent. Average rates for a 5/1 adjustable rate mortgage rose from 3.02 percent to 3.08 percent. Discount points for fixed rate mortgages were unchanged at 0.60 percent and ticked upward from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages. 

What’s Ahead for the Week? 

Tuesday we get Construction Spending.   On Thursday we’ll see ADP payrolls for March along with Freddie Mac’s PMMS weekly report on mortgage rates and the Non-Farm Payrolls report. 

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March 24th, 2014
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 What Home Buyers Need to Know for the Week of March 24, 2014

Guy looking up in colorLast week’s economic news affecting housing included: 

  1. Housing Market Index (HMI) for March, a report on housing starts and building permits for February; 
  2. The National Association of REALTORS® released its Existing Home Sales, a report for February and;
  3. The Federal Reserve issued its first FOMC statement under the helm of Fed Chair Janet Yellen. 

The National Association of Home Builders Wells Fargo Housing Market Index rose by one point to a reading of 47 in March against a reading of 46 in February and against an expected reading of 50. Readings above 50 signify that more builders have a positive view of housing market conditions. Conditions contributing to the sluggish reading included a lack of raw land for development and labor shortages. The NAHB also cited rising home prices and mortgage rates as reasons for builder’s less that positive outlook.

The U.S. Commerce Department released reports on Housing Starts and Building Permits Issued for February. Housing starts dipped to 907,000 in February against expectations of 908,000 and January’s reading of 909,000.  Severe winter weather was the likely factor for the lower numbers. However building permits issued increased to 1.02 million on a seasonally adjusted basis against January’s reading of 945,000. February’s reading represents a 7.70 percent increase over January’s permits and was attributed to a sharp rise in plans for condominiums and rental housing projects. 407,000 permits for multi-unit buildings were issued in February and represented a 24.3 percent increase on an annualized basis. Analysts saw the increase in building permits as a sign that construction will pick up as warmer weather arrives. 

The National Association of REALTORS® reported a decrease of 0.40 percent in sales of existing homes from January’s reading. February’s reading of 4.60 million homes sold on a seasonally-adjusted annual basis was lower than January’s reading of 4.62 million existing homes sold, but exceeded expectations of 4.58 million existing homes sold. Analysts identified familiar causes such as high mortgage rates, home prices, bad weather and a short supply of available homes for the dip. New standards for “qualified mortgages” became effective in January and were seen as a possible obstacle for potential home buyers as mortgage lenders continue to keep a tight rein on credit policies. 

Fed Policy is expected to stay much the same as it was under its previous chairman. FOMC approved an additional $10 billion reduction in asset purchases designed to keep long term interest rates low. The Fed will now purchase $55 billion monthly in mortgage-backed securities and treasury bonds as compared to its original level of $85 billion monthly. Wall Street did not respond well to FOMC’s revised projections for short-term interest rates, which were revised from 1.75 percent by the end of 2016 to a possible short-term rate of 2.25 percent. 

FOMC removed the benchmark 6.50 percent national unemployment rate for raising the federal funds rate, which is currently 0.250 percent. Instead, the Fed will review a wide range of economic indicators before changing monetary policy. Janet Yellen, in her first press conference as fed chair, said the Fed may consider rising short-term interest rates a few months before its original target of December 2015 to October 2015. 

Mortgage rates dropped last week according to Freddie Mac. Average mortgage rates fell from 4.37 percent to 4.32 percent for 30-year fixed rate loans. Rates for 15-year mortgages dropped from 3.38 percent to 3.32 percent. The average rate for a 5/1 adjustable rate mortgage fell from 3.09 percent to 3.02 percent. Discount points were unchanged at 0.60 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages. 

What’s Ahead This Week? 

Scheduled economic reports for this week include the Case-Shiller, FHFA Home Price Indexes for January and Pending Sales of Existing Homes. 

 

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March 17th, 2014
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What Home Buyers Need to Know for the Week of March 17, 2014

Guy looking up in colorUnusually severe winter weather conditions affected housing-related indicators as home builders and home buyers continued to stay on the sidelines.  However, last week’s economic reports effecting home purchasing provided some upbeat news as compared to the recent slumps.

Employment is probably the most major factor in the decision for buying a home for most of us. Want-a-be-home buyers received a vote of confidence last week as January’s job openings increased by one million for January as compared to December’s reading of 39 million jobs looking for workers.

Weekly jobless claims fell from 324,000 to 315,000. The Bureau of Labor Statistics reported expectations of 330,000 new jobless claims, making this report was good news. Weekly reports are more volatile than monthly statistics; analysts typically track employment trends by reviewing rolling averages of several weeks’ new jobless claims data, but with spring right around the corner and a hard winter things are looking up.

Like gas prices Freddie Mac reported that average mortgage rates rose as well last week. The rate for a 30-year fixed rate mortgage rose by nine basis points to 4.37 percent. 15-year fixed rate mortgages had an average rate of 3.38 percent; this was an increase of six basis points. The average rate for a 5/1 adjustable rate mortgage was 3.09 percent, up from the previous week’s reading of 3.03 percent. Discount points dipped from 0.70 to 0.60 percent for a 30-year fixed rate mortgage and remained unchanged for 15-year and 5/1 adjustable rate mortgages at 0.60 and 0.40 percent.

Retail Sales increased for the first time in three months according to the Commerce Department. February retail sales surpassed expectations of a 0.20 percent gain and came in at 0.30 percent. January figures were downwardly adjusted to -0.60 percent. Retail sales exclusive of automotive sales were also higher at 0.30 percent than expectations of 0.10 percent.

The University of Michigan Consumer Sentiment index was slightly lower at 79.9 than expectations of 80.8. This was the lowest reading in four months, and was attributed in part to higher gas prices and consumer concerns over developments in Ukraine.

 What’s Ahead for the Week? 

The NAHB Home Builder Index for March, Housing Starts and Building Permits for February, and Existing Home Sales are set for release. 

On Wednesday, the Fed’s FOMC statement will be released and Fed Chair Janet Yellen will give a press conference. The Fed is expected to continue its ongoing tapering of quantitative easing. 

Weekly Jobless Claims and Freddie Mac’s Primary Mortgage Market Survey round out the week.

If you’re interested in learning more about home ownership in your city be sure to visit our local Google+ Communities. Here you’ll find great information from real estate agents, mortgage lenders and general contractors in your neighborhood.

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March 10th, 2014
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What Home Buyers Need to Know for the Week of March 10, 2014

Guy looking up in colorMortgage bonds sold off last week and touched a near 10-week high as tensions between Russia and Ukraine increased; the economy showed signs of growth and the February Non-Farm Payrolls report posted a better-than-expected result.  Mortgage rates will continue to be affected by the ongoing events in Ukraine. Additionally, the disappearance of Malaysian Airlines Flight MH370 may affect rates. If the event is determined to be a mechanical failure, the effect on rates will be nil. However, if it’s learned that there’s a link to terrorism or war, safe-haven buying may commence and mortgage rates should fall.

The 4.0% 30-year Fannie Mae (FNMA) coupon posted its worst one-week performance in over three months last week. Nationwide, a 30-year fixed rate mortgage moved higher by as much as +0.50 percentage points and a home buyer’s purchasing power fell by as much as four percent.

The majority of last week’s action came in after we got the February Non-Farm Payrolls report. The report showed 175,000 net new jobs created last month, with a net +25,000 revision to the results of the prior two months. It was also the first time since November that Non-Farm Payrolls beat its 6-month moving average.

Currently, the Federal Reserve purchases $30 billion of mortgage-backed securities (MBS) monthly in a program known as “Quantitative Easing”. The program helps to keep mortgage rates affordable by creating artificial demand for MBS and mortgage rates down.

According to the Fed, Quantitative Easing helps create jobs. The Federal Reserve has a dual mandate to maximize employment and stabilize inflation. In theory Quantitative Easing increases the number of working Americans, but at the risk of inflation.

Freddie Mac’s most recent survey indicated that with Quantitative Easing at $30 billion monthly, the national average conforming rate is at 4.28% and without Quantitative Easing analysts say, today’s mortgage rates would be closer to 5%. This is among the reasons why mortgage rates spiked last week, and why rates are continuing higher today. 

What’s Ahead for the Week? 

Little economic data is set for release, so markets are expected move on last week’s momentum and in response to geopolitical events.

Two Federal Reserve members are scheduled to speak today; Philadelphia Fed President Charles Plosser and Chicago Fed President Charles Evans. Wall Street will be listening for clues about the future of Quantitative Easing and other Fed policy ahead of next week’s Federal Open Market Committee meeting.

There are also two Treasury Auctions which can affect mortgage rates — one for the 3-year note on Tuesday and the other for the 10-year note on Wednesday. Treasury yields don’t link with MBS directly, but strong international demand for U.S. Treasury issuance’s tends to correlate with high demand for MBS. 

Thursday we get Initial Jobless Claims; Retail Sales and closing the week for Friday we’ll get the Producer Price Index.

If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right of our blog. Here you’ll find great information from local real estate agents, mortgage lenders and general contractors to assist you.

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March 3rd, 2014
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What Home Buyers Need to Know for the Week of March 3, 2014

Guy looking up in colorLast week’s news effecting real estate was mixed with:

  1. new home sales increasing;
  2. both Case-Shiller and FHFA Home Price Reports pointing to slower growth in home prices;
  3. mortgage rates moved higher for the third consecutive week;
  4. weekly jobless claims higher than expected;

Weekly jobless claims also rose to 348,000 against projections for 335,000 new jobless claims. The four-week average for new jobless claims remained steady at 338,250. Weakness in the jobs sector may have a lot to do with harsh winter weather and we could see a rebound and conditions improve.

Last week’s wild card was new homes sale jumping unexpectedly to their highest since 2008. New home sales provided unexpected good news; they jumped by 9.60 percent in January, to a seasonally-adjusted annual rate of 468,000 sales against expected sales of 405,000.

December’s reading was upwardly revised from 414,000 to 427,000 new homes sold.

January’s reading was the largest increase in new home sales since July 2008, and there may be more positive housing news ahead as builders said that some of the sales lost during winter months may be recouped during spring.

Pending home sales increased by 0.10 percent in January to an index reading of 95 as compared to December’s reading of 94.9, which was the lowest reading since November 2011.

The Case-Shiller composite home price index for December reported that home prices declined by 0.10 percent in December, which was the second consecutive monthly decline. On a seasonally adjusted basis, home prices rose 0.80 percent in December as compared to November’s reading of 0.90 percent. Year-over-year, home prices grew at a rate of 13.40 percent, their fastest pace since 2005.  We see the momentum of year-over-year home prices declined in December as compared to November’s year-over-year reading of 13.70 percent and 11 of 20 cities in Case-Shiller showed declines. 

FHFA’s quarterly House Price Index for the fourth quarter of 2013 pointed to its tenth consecutive gain in quarterly home prices. Seasonally adjusted home prices rose by 0.80 percent from November to December 2013.

FHFA, which oversees Fannie Mae and Freddie Mac, reported that home prices increased by 7.70 percent from the fourth quarter of 2012 to the same period in 2013. Adjusted for inflation, the agency reported a year-over-year home price increase of 7.0 percent. FHFA House Price Index data is based on sales information for homes with mortgages held or securitized by Fannie Mae and Freddie Mac.

Freddie Mac reported that average rates for fixed-rate mortgages rose last week.  The rate for a 30-year fixed rate increased by 4 basis points to 4.37 percent and 15-year mortgages also increased by 4 basis points to 3.39 percent. The average rate for a 5/1 adjustable rate mortgage fell by 3 basis points to 3.05 percent. Discount points were unchanged at 0.7 0 percent for fixed rate mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.

 What’s Ahead for the Week?

This week’s scheduled economic news includes Construction Spending, the Federal Reserve’s Beige Book Report, Weekly Jobless Claims and Freddie Mac’s Report on Mortgage Rates. We’ll close the week with the Bureau of Labor Statistics release of Non-Farm Payrolls.

If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right of our blog. Here you’ll find great information from local real estate agents, mortgage lenders and general contractors to assist you.

 

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February 24th, 2014
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  What Home Buyers Need to Know for the Week of February 24, 2014

Guy looking up in colorLast week’s economic data continued to supported indicating that housing markets are slowing, The National Association of Home Builders/Wells Fargo Home Builders Index (HBI) dropped by 10 points to a reading of 46 for February; Home Builder Confidence dropped to its lowest reading in nine months and fell below the benchmark of 50, meaning more builders are pessimistic about current market conditions than not.  Furthermore, the Builder Confidence Reading had been expected to have a reading of 56.

Regional readings of Builder Confidence were also lower: 

  1. Northeast: HBI fell from 41 to 33 points. Weather however was a major concern as this area has experienced a series of nasty winter storms.

  2. South: HBI fell from 50 in January to 46 in February.  The smallest decline among the four regions.

  3. Midwest: HBI fell from 59 points to a reading of 50.

  4. West: HBI fell by 14 points to February’s reading of 57. Desirable areas in the West had been leading the nation in home price appreciation. February’s reading could be signaling that buyer enthusiasm is diminishing as rapidly rising home prices reduced affordable housing options. 

The National Association of REALTORS® reported that the national average for today’s home prices rose to $188,900, which was 10.70 percent higher year-over-year. Furthermore they reported existing home sales fell by 5.10 percent in January. The seasonally-adjusted annual rate of home sales for January was 4.62 million sales against expectations of 4.65 million and December’s reading of 4.87. January’s inventory of available existing homes was 1.9 million; this represented a 4.90 month supply of existing homes for sale and real estate agents prefer to see at least a six month inventory. 

Wednesday we got Housing Starts for January. Although analysts predicted a figure of 945,000 housing starts as compared to an upwardly adjusted 1.05 million housing starts in December, only 880,000 housing starts were reported. The Department of Commerce cited extreme winter weather as a cause for the drop in housing starts, which reached their fastest pace since November 2008.  The good news is that housing starts delayed during winter should begin during spring. 

According to Freddie Mac’s weekly survey, average mortgage rates rose across the board. The rate for a 30-year fixed rate loan rose by 5 basis points to 4.33 percent. The average rate for a 15-year fixed rate mortgage rose by two basis points to 3.35 percent. The average rate for a 5/1 adjustable rate mortgage moved up by three basis points to an average rate of 3.08 percent. Discount points for all three products were unchanged with readings of 0.70 for 30-year and 15-year fixed rate mortgages and 0.50 percent discount points for 5/1 adjustable rate mortgages. 

The Bureau of Labor Statistics reported that weekly jobless claims came in at 336,000 against expectations of 335,000 new jobless claims. The prior week’s reading was for 339,000 new jobless claims. Analysts said that job growth may be slowing after last year’s growth, but also noted that winter weather had slowed hiring for labor sectors likes construction and manufacturing.

What’s Ahead for the Week? 

The week brings a series of economic reports effecting housing and possibly good news for home buyers.  The Case Shiller Home Price Indices and FHFA Home Price Index will be released. Consumer Confidence and the University of Michigan’s Consumer Sentiment Report along with New Homes Sales and Pending Home Sales rounds out the week’s scheduled news. 

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February 10th, 2014
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What Home Buyers Need to Know for the Week of February 10, 2014

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Last week’s mortgage and housing-related reports began with Construction Spending for December.  It produced a reading of 0.10 percent or a seasonally adjusted $930.5 billion. December’s reading had been expected to have a reading of 0.40 percent. Spending for private sector projects rose by 1.00 percent and of this amount, residential construction spending increased by 2.60 percent.  Private sector spending for non-residential construction fell by -0.70 percent.

Although construction spending posted a fractional gain, it good news in that construction spending is being dominated by residential construction and due to inclement weather, any gains in construction spending during December was considered positive. 

Employment related reports dominated last week’s economic reports. The ADP employment report for January indicated that only 175,000 new private sector jobs were added and the lowest reading in five months. December saw 227,000 new jobs. Severe weather conditions were pointed to as a leading impact, causing the lower than expected jobs growth for both months.

Concerns are mounting that lackluster jobs reports could be showing more fundamental are needed to inspire jobs growth.  The economy’s month-to-month job reports can be unpredictable and the last quarterly results provided some positive information.  The three month period ending January 2014 showed an averaged job growth of 230,000, as compared to an averaged reading of 220,000 jobs added during the same period a year ago. 

New Jobless Claims came in at 331,000, significantly less than the prior week’s reading of 351,000 new jobless claims and lower than the forecast reading of 337,000. Analysts point to these readings as support for gradual improvement in the economy. 

The Bureau of Labor Statistics (BLS) released its Non-Farm Payrolls report for January, which indicated that 113,000 new jobs were added during the first month of 2014, a far cry from the 200,000 jobs needed to move us out of a jobless recovery where only the 1% benefit. The reading was better than December’s reported 75,000 jobs added.  Economists pointed to underlying causes for December’s dip in jobs growth due to the healthcare law and government sectors cut jobs and continue bad weather for January.

With lower job growth and estimates continually being missed higher unemployment rate would be likely. For now the national unemployment rate dropped to 6.60 percent from last week’s reading of 6.70 percent. Readings for labor and unemployment are important for the overall economy and housing markets; consumers worried about jobs that they might lose or jobs they cannot find; likely won’t be buying homes in the near term and creates a negative ripple effect throughout the nation’s recovery. 

The Federal Reserve’s FOMC Committee has established a benchmark reading of 6.50 percent as one of the economic indicators it intends to use in decisions concerning it move away from Quantitative Easing and for the second time maintained its scheduled exit plan.

It will be interesting to see where the FOMC stand will be at the next round of reduced purchasing of treasury notes and mortgage backed securities. 

In lite of lackluster jobs numbers, last week’s Freddie Mac’s Primary Mortgage Market Survey showed average mortgage rates dropped across the board. The reported rate for a 30-year fixed rate mortgage was 3.23 percent, down from the prior week’s 3.32 percent. Discount points were unchanged at 0.70 percent. The rate for a 15-year fixed rate mortgage fell by seven basis points to 3.33 percent. Discount points ticked upward from 0.60 to 0.70 percent. The rate for a 5/1 adjustable rate mortgage fell by four basis points to 3.08 percent with discount points unchanged.  

If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right of our blog. Here you’ll find great information from local real estate agents, mortgage lenders and general contractors to assist you in your path to home ownership. 

Whats Coming Up The Week?  

This week’s scheduled economic news includes Weekly Jobless Claims, Freddie Mac’s PMMS, Retail sales & Retail Sales excluding Automotive Sales, along with the University of Michigan’s Consumer Sentiment Report.

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February 3rd, 2014
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What Home Buyers Need to Know for the Week of February 3, 2014

Guy looking up in colorLast week was a mixed bag of news; the Department of Commerce reported a dip in new home sales and mortgage rates fell. December’s reading of 414,000 for new home sales fell short of November’s revised reading of 445,000 new homes sold, as well as the expected sales of $455,000. The consensus figure was based on November’s original sales reading of 464,000 new homes sold.  The inventory of available new homes rose from last month’s level of 4.70 month supply to a 5 month supply in December. Cold weather was cited as a cause for lower new home sales.

New home sales increased by 4.50 percent year-over-years; this was the highest reading since 2008. The median price of a new home rose by 0.60 percent in December to $270,299.

The national median home price was $265,800 in 2013, an annual growth rate of 8.40 percent and the highest annual growth rate for median home prices since 2005.

Economists cited rising mortgage rates, new mortgage rules and a lagging labor market as signs that slower home sales could be expected in 2014.

Pending home sales echoed the slowing trend in home sales; the index reading fell by -8.70 percent to a reading of 92.4 in December.

All Regions Reported A Drop In Pending Sales Compared To November:

Northeast           -10.30 percent

West                      -9.80 percent

South                    -8.80 percent

Midwest               -6.80 percent

This was the lowest reading for pending home sales since October 2011.

The Case-Shiller 10 and 20 city home price indices for November reported a 13.70 percent gain in home prices year-over-year. This was the fastest annual growth rate in home prices since 2006. Further evidence of slower growth in home prices was evident as nine of 20 cities tracked reported lower home prices.

Wednesday’s Federal Reserve’s FOMC statement confirmed its continued path of reduction on quantitative easing by an additional $10 billion monthly. Monthly purchases of mortgage-backed securities and Treasury securities will be reduced from January’s level of $75 billion to $65 billion in February. Economists expected this reduction to occur.

Freddie Mac’s Primary Market Survey reported lower average mortgage rates. The rate for a 30-year fixed rate mortgage fell by 7 basis points to 4.32 percent with discount points unchanged at 0.7 percent. 15-year mortgage rates also fell to 3.40 percent with discount points lower at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage fell by 3 basis points to 3.12 percent with discount points unchanged at 0.50 percent.

This was welcome news as homebuyers and mortgage lenders have felt the effects of higher home prices and new mortgage rules that became effective January 10.

Weekly jobless claims jumped to 348,000 from the prior week’s 339,000 new jobless claims. This was the highest level of new jobless claims in six weeks. Reasons for increased claims were unclear, but were possibly caused by lingering influences of the holiday season or a sinking labor market.

Consumer confidence rose in January to a reading of 80.7 as compared to December’s reading of 77.5;  January 2012′s reading of 58.4.

If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right of our blog. Here you’ll find great information from local real estate agents, mortgage lenders and general contractors to assist you in your path to home ownership.

What’s Ahead for the Week?

This week’s scheduled economic news effecting housing includes Construction Spending, Non-Farm Payrolls, the National Unemployment Rate, Freddie Mac’s PMMS Report and Weekly Jobless Claims.

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