Talking about the ADP employment report, the latest report on construction spending and the ISM Manufacturing Index. Plus a little more about home prices…
A Glimpse of Things to Come?
Everybody is waiting on Friday’s BIG Employment report for March. No matter what the report says, we can expect mortgage rates to react. So that is why today’s report from ADP could be a glimpse at things to come.
ADP reported that there were 191,000 jobs added to the nonfarm private sector.
Carlos Rodriguez, president and chief executive officer of ADP said:
The 191,000 U.S. private sector jobs added in March is slightly above the twelve-month average. Hopefully, this could be a sign there is more growth to come.
A positive report from ADP could foreshadow a positive Employment Report on Friday.
I wish the latest construction spending report from the Census Bureau was a bad April Fool’s joke. Residential construction spending in February 2014 decreased 0.7% from January 2013. Private residential spending is still 47% below the peak in early 2006 BUT it has increased almost 50% in the 3 years ending in February.
So while the report was not as good as we wanted, it does appear that things are still improving overall.
ISM Manufacturing Index Increased
The latest ISM Manufacturing Index was just released and they said that economic activity in the manufacturing sector expanded in March for the 10th consecutive month. Also the overall economy grew for the 58th consecutive month.
Like many of the other recent economic or real estate reports, it may not be as good as we want, but it is STILL good news.
Home Prices Are Not Falling
In Monday’s big Looking Forward Looking Back post I covered some of the the recent news about US home prices from Case-Shiller and the FHFA and the latest data on new home sales. Pretty much US home prices are still increasing but the rate of the increase has slowed down.
\Yes it is possible that the winter weather contributed to some of the weak reports about new home sales and house prices. However, home prices are still increasing! There’s no cause for alarm, as year-over-year home prices increased by 13.2% according to Case-Shiller. David Blitzer, chair of the S&P Dow Jones index committee, said
The housing market is showing signs of moving forward with more normal price increases.
Is This the NEW Normal?
Many analysts think home prices will still increase in 2014 but it will be at a slower pace. Some of the reasons why include higher mortgage rates and the new mortgage rules that makes it harder for some people to qualify for a mortgage.
Some of the Facts from Monday’s Post
The S & P Case Shiller 10 and 20 city home price indices posted year-over-year gains of 13.5% and 13.2% respectively.
The S & P Case-Shiller 10 and 20-city home price index reports shows us that the old saying that “real estate is local” is especially true today. Some areas have seen a higher than average rate of year-over-year home price growth but other areas are NOT increasing at the same pace.
The Federal Housing Finance Agency’s House Price Index (HPI) for January 2014 indicated that home prices rose by a seasonally-adjusted rate of 0.5% from December to January. According to the FHFA HPI, home prices increased by 7.4% YOY.
January’s HPI was 8% below the index’s April 2007 high. FHFA’s month-to-month data for the nine census bureau districts also shows us the differences in housing markets throughout the US.
My suggestion is that everyone remain calm and use the data from your local real estate markets.
Don’t get too distracted by the national reports.
Real estate is a highly localized subject. Think about the difference in prices between a home on the lake and one across the street from the lake. Think about the HUGE variation in home prices and types in a 10 mile radius of your home.
It takes more than just reading about home price trends for the entire US to understand what is happening to home prices in your area.