Looking back at the big news for real estate, housing & the economy for last week and what to keep an eye on…
First off, in the next week or so, you will notice some more changes around here as I change the real estate search portion of the website. It shouldn’t affect the blog as that is on a different server and running a different software. There may be some broken links for a couple of days but bear with me.
Hope you had a wonderful weekend. There was plenty of real estate and housing news last week so let’s dive right in!
Today’s Big News: New Home Sales
Earlier this morning, the Census Bureau released their report on New Home Sales for December 2013. New Home Sales were down 7% from the November 2013 level but are up 4.5% from the December 2012 level. Check out the charts:
New Home Sales
Months Supply New Homes
New Home Median Price
New Home Average Price
2013 was the best year for new home sales since 2008. And New Home Sales for all of 2013 were 16% higher than 2012. Sounds great, right?
This is talking about the entire US and is important for both real estate and the economy. Think about all the jobs required to make the products used to build a home. Not just talking about wood or shingles. Everything from the shingles to the fixtures means somewhere, someone has a job.
We really want a strong housing market since it will also mean a strong economy. Plus the US population keeps growing faster than new homes are being built. Which isn’t good since we are already suffering from tight inventory levels in many areas/price ranges.
Jobs Jobs and Not More Jobs
Sadly last week’s Jobs Report was not as good as you or I would have wanted. However, Weekly Jobless claims did come in lower than expectations.
Until we see the number of people working increase, then we are not going to see real economic recovery. They may shuffle the numbers around but the truth is plenty of people are still not working. Or people are taking part time jobs that pay an extremely low wage simply so they can survive.
There is a difference between surviving and living…
Existing Home Sales
In case you aren’t subscribed and missed last week’s post, NAR released their Existing Home Sales Report for December 2014. Overall it was positive. Some of the highlights include:
US existing home sales (all types of homes) for all of 2013 were at the highest point since 2006
US median existing home price for all of 2013 was 11.5% higher than the 2012 median price
Some people think that pent-up demand and a lingering shortage of available homes contributed to last year’s rapid rise in home prices. Because home prices have increased, it means that more home owners are no longer underwater. So it stands to reason these home owners can sell their homes now and at least break even or maybe make some money.
If there is one thing I hope people have learned from the housing meltdown it is that real estate values can go up or down.
FHFA on Home Prices
In the same post that talked about NAR’s Existing Home Sales Report, I shared the latest news from FHFA on home prices. While not as up to date as NAR’s report, it was still good news:
- 22nd consecutive month of increasing home prices
- November 2013 home prices up 7.6% from November 2012
Of course, both of the NAR & FHFA reports are talking about the entire US. Always look for local expertise to determine exactly what is happening in your real estate market. It could be better or worse
On Friday I posted my normal update on the average Mortgage Rates reported by Freddie Mac, the MBA and Bankrate.com. But to recap, rates decreased slightly…
Which is opposite of what everyone thought was going to happen to mortgage rates in 2013.
But before you rejoice or waste valuable time, let me remind you that the Federal Reserve is meeting this week. So we may see another reduction in their QE program. Which should put some upward pressure on rates.
However the financial turmoil of the past several days in overseas market may influence the Fed’s decision. I would suggest calling your friendly mortgage professional ASAP and seek their advice. Waiting may turn out to be costly.
Each and Every Day
Each and every day, the economy appears to be getting stronger in a new and different way. The latest indicator of an improving economy was the Leading Economic Indicators report for December 2013. It moved up by 0.10%, which pushed the index to a reading of 99.4. December’s reading represented the sixth consecutive month that the index gained ground.
The economists expect steady growth during the spring but also pointed out something to be concerned about: possible political gridlock over the national debt ceiling. Leave it to the idiots in Washington to muck thing up…
Lots of stuff to watch this week including:
- Consumer Confidence Index
- Weekly Jobless Claims
- Mortgage Rate reports from Freddie Mac & MBA
- Reports on consumer spending and consumer sentiment
But the biggest thing may be the FOMC statement after their meeting on Wednesday. It is expected to provide news of the Fed’s plan for further tapering of its quantitative easing program. Which should have an impact on mortgage rates.