Looking at the big stories from last week for real estate, housing and the economy plus what we need to keep an eye on for the week of 12-30-2013…
Well this is both the first blog entry in much too long and the last Looking Forward Looking Back post of 2013. It has been an interesting year and we can only hope that the real estate market continues to improve in 2014. Let’s look at the most recent news for real estate, housing and the economy:
I have said several times that it is going to be hard for the real estate market to recover without confident consumers. So I am glad that the University of Michigan’s Consumer Sentiment Index improved for December from the November reading (after it was adjusted from 82.5 to 75).
Analysts noted that consumers were relieved when legislative gridlock ended. I was pleasantly surprised to see the idiots in Washington finally do something right for a change. It may not have been exactly what either side wanted, but it was better than not making any progress.
A positive sign for the economy was that durable goods orders reached their highest level since May with November’s reading of + 3.5%. If we leave out the transportation sector, the reading for November was +1.2 percent. This is a good sign because it means an increase in manufacturing due to the increase in orders. Most economists expected an overall increase of 2.0% for overall durable goods orders.
New Home Sales
More good news for housing and the economy came from the U.S. Commerce Department last week. The Commerce Department New Home Sales report for November 2013 was above expectations. 464,000 new homes were sold in November against expectations of 440,000 new homes sold.
The expectation for November was based on the original reading of 444,000 new homes sold in October, which has been revised to 474,000 new homes sold. The revised reading for October 2013 is the highest since July of 2008.
Most people will say that increasing mortgage rates hurt home sales this past summer. It appears that buyers are adjusting for higher mortgage rates by spending less. Since many buyers that are using a mortgage will set their max price by the corresponding monthly payment, this could mean a shift in the demand for smaller or less expensive homes.
Also related, is the latest Home Builder Confidence survey was at its highest level since 2005. We can hope that this yet another sign that the economy is recovering and that 2014 will mean a stronger housing market.
You probably saw the news about many people having their unemployment benefits expire after Congress failed to pass an extension. I wish we had seen the idiots in Washington work to create more jobs instead of some of the political grandstanding we have seen over the past several years. Too much time has been wasted bickering instead of working to get the economy going again.
The good news is that the latest Weekly Jobless Claims report came in lower than expectations and significantly lower than the previous week’s new jobless claims. This was the largest decrease in new jobless claims since the week of November 17, 2012. Analysts expect new jobless claims to decrease at a slower rate in early 2014.
I do wonder how the numbers will be affected by the number of people having their unemployment benefits expire.
I hope to get back into the swing of things and start posting the weekly updates on average mortgage rates every Friday. I was relieved to see that mortgage rates did not skyrocket after the Fed announced its plan to start tapering Quantitative Easing.
Rates did increase though with both Freddie and the MBA reporting slight increases in average mortgage rates. The bigger issue may be the tighter lending rules we are going to have to contend with in 2014.
Just like last week, this week’s schedule of economic news is reduced due to a holiday (Happy New Year BTW). But we do have several reports to watch this week:
- Pending home sales for November 2013
- Case/Shiller Housing Market Indices
- Consumer Confidence
- Weekly Jobless Claims
- Freddie Mac & the MBA reports on mortgage rates
- Construction Spending
Well, it feels good to be writing again. However, I know I have lots of work to do to catch up while getting the redsign completed at the same time.
No rest for the wicked?