Looking at all the recent news for real estate and housing plus what we need to keep an eye on for 11-25-2013…
It will either be a short week for you or a very long week because of Thanksgiving. If you are one of the people that will brave the crowds to shop, I hope you will remember to treat others like you would want to be treated. That being said, I hope you have a safe and happy Thanksgiving!
I wrote last week about both the National Association of Homebuilders Wells Fargo Housing Market Index and the latest Gallup Economic Confidence Index. I feel that economic recovery will be slower if consumers and business don’t feel confident.
However, I read an interesting article in the Washington Post. Consider this quote:
…in terms of immediate economic impact, as long as markets don’t panic, neither do consumers.
Not sure I agree. More or less they are saying there is NOT a strong tie between consumer confidence and economic activity. They compared the University of Michigan’s consumer sentiment index with the corresponding change in personal consumption expenditures. It does seem that they are related.
But like I said, I am not totally convinced. What do you think?
Last week we got the latest inflation numbers from the BLS. CPI rose 0.1%. Remember that inflation is one of the things that the Fed is watching as they consider when to taper QE. When the Fed does start to taper QE, you can expect mortgage rates to skyrocket.
If this happens at the same time that the tighter lending rules kick in (January 2014), we might see some tough times again in housing.
Thank goodness jobless claims were significantly lower than expected. Not saying we are where we need to be but it is still good news. Weekly Jobless Claims were lower at 323,000 compared to the previous week’s reading of 344,000.
In October 2013, US unemployment was 7.3%. In South Carolina, unemployment dropped to the lowest level since September 2008.
Looking locally, the unemployment rate in Anderson County was 6.5% for October 2013. This is much better than the 8.0% reported for October 2012.
I will let you be the judge as to whether or not we can trust the numbers coming from our government regarding unemployment.
Existing Home Sales
The National Association of REALTORS reported that Existing Home Sales for October were lower than for September’s reading of 5.29 million, but slightly exceeded the expected reading of 5.10 million. October’s reading came in at 5.12 million sales of existing homes.
Pending Home Sales
I wish this morning’s news regarding the October 2013 Pending Home Sales from NAR was better than their report on Existing Home Sales. Sadly, NAR’s Pending Home Sales Index is at the lowest level since December 2012. Also, Pending Home Sales are 1.6% lower than the same time period in 2012.
Remember this is counting properties under contract and not actual closed sales. And that both of NAR’s reports are about the entire US and not just what is happening in your local market.
NAR is saying that higher mortgage rates and the tight inventory levels are behind the drop in Pending Sales. I would say that the government shutdown hurt home sales more than increasing mortgage rates.
Why? Because mortgage rates are STILL at super low levels.
The Fed Speaks
The FOMC minutes indicated that the committee has ongoing concerns over national unemployment rate. Most people interpreted the Fed minutes for last month’s FOMC meeting as confirming the Federal Reserve’s intention to leave quantitative easing unchanged for now.
So we dodged that bullet for now.
As usual, I posted the weekly Mortgage Rate Update on the average mortgage rates from Freddie Mac and the Mortgage Bankers Association. And we got something else to be thankful for since most mortgage rates decreased or stayed the same.
Last week, LPS reported that the number of homes in foreclosure is down 30% from last year. This is the lowest level since 2008. Also the number of delinquent loans decreased about 11% year over year.
Today, LPS reported that US home prices in September 2013 were up 9% compared to September 2012. No promises but I will try to get the latest Monthly Market reports for Upstate SC up tomorrow.
Stuff we need to keep an eye on this week includes:
- Housing Starts and Building Permits
- Case-Shiller Housing Market Index
- FHFA Home Price Index
- Consumer Confidence Index
- Weekly Jobless Claims
- University of Michigan Consumer Sentiment Index
- How Much Turkey And Stuffing I Eat