Let’s look at the latest news for real estate and the economy and what we need to keep an eye on for November 18 2013…
It has been way too long since I posted one of these types of posts. With last Monday being Veterans Day, it was a quiet week for economic and real estate news. But let’s dive in and look at what happened and what we can look forward to this week:
I wish I could have reported better news about mortgage rates in last week’s Mortgage Rate Update. You can follow the link or I can sum it up by saying that BOTH Freddie Mac and the MBA reported increases in their average mortgage rates.
Of course, you should remember that mortgage rates are still at historically low levels.
Weekly Jobless Claims were released Thursday and were higher than expected but lower than the previous week. Which is probably going to mean that we will see mortgage rates rise again. Check back here Friday to see if the improvement in unemployment numbers translate into higher rates.
It appears that we might not see any big changes in the Federal Reserve’s Quantitative Easing program IF Janet Yellen, Obama’s choice for leading the Federal Reserve gets her way. She defended the Fed’s quantitative easing policy during her first confirmation hearing before the Senate Banking Committee. Quantitative Easing refers to how the Federal Reserve has been buying $85 billion in Treasury and mortgage backed securities every month.
The Fed claims it was designed to keep long-term interest rates and mortgage rates low. There is no doubt that mortgage rates have been low but it certainly has not helped create many jobs. Wall Street loves it but it has not helped the average American looking for a job.
I seriously doubt we will see any changes in Quantitative Easing this year. But we never know what the Fed may do. We DO know that once the Fed does start to taper QE, mortgage rates will increase quickly. Always a good idea to listen to the Fed and see how the markets react.
Good news for housing came from Trans Union last week about the number of mortgage defaults. They said that mortgage defaults are at the lowest level in 5 years (Q3 2013). TransUnion said that mortgage defaults are also lower year-over-year for the third quarter of 2013. Trans Union defines a mortgage default as a home loan that is at least two months past due on payments.
The improvements in the real estate market and the decrease in mortgage defaults are due to improvements in employment numbers, the historically low mortgage rates, the lack of inventory of available homes and increasing home prices. We may be seeing a pattern here since mortgage defaults have decreased in the past five quarters.
TransUnion thinks mortgage defaults will fall below 4% by the end of 2013. Let’s hope we do see mortgage defaults continue to fall since that means fewer foreclosures. Fewer foreclosures help property values.
More importantly, fewer foreclosures means fewer people losing their homes!
Several things we need to keep an eye on this week:
- NAHB Home Builder Confidence Index for November
- October 2013 Retail Sales
- October 2013 Consumer Price Index
- FOMC Minutes
- The weekly Jobless Claims report
- Freddie Mac and the MBA on mortgage rates
- NAR Existing Home Sales for October
- October 2013 Monthly Market Reports for Upstate SC
And I am sure there may be some other stories that pop up so be sure to check back.
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