Talking about the FOMC minutes and mortgage rates, home prices & sales, the economy is improving and much more…
Let’s kick this week off by talking about what happened last week that is going to affect real estate and the economy. Then I will list some of the stuff we need to keep an eye on this week.
Mortgage Rates Up After FOMC Minutes Released
Just as we feared, mortgage rates rose after the minutes for the latest FOMC meeting were released. The rise in rates was due to more hinting about “tapering” of the Fed’s quantitative easing program. Nobody knows for sure when it will be but most likely we are looking at early September.
And just like all of the previous hints from the Fed about reducing QE, we saw a sharp rise in mortgage rates.
As usual, I posted the Mortgage Rate Update on Friday. Sadly, both Freddie Mac and the MBA both reported rates increasing. And these are rates from BEFORE the FOMC minutes were released so we can look forward to this week’s average mortgage rates to increase even more. Definitely not good news for real estate.
Home Prices and Sales
Last week, NAR released its Existing Home Sales report for July 2013 and reported existing home sales came in above expectations. This is great but you must remember this is not the highly localized info you need to make informed decisions when buying or selling real estate.
FHFA reported that home prices for homes with mortgages owned by Fannie Mae and Freddie Mac rose by 7.70% year-over-year in June, home prices rose slightly from May’s year-over-year- rate of 7.6%. Check out the chart below:
I think you will agree that it is hard for the real estate market to improve unless the economy also improves. So it is great that the Leading Economic Indicators (LEI) for July rose by 0.60 to a reading of 96.0. This is better than expected. The LEI measures the health of the economy by measuring 10 top economic sectors. 8 of the 10 factors that are measured improved.
New Home Sales
Sadly the news last week about new home sales was not positive. New home sales for July were lower than expected. One silver lining to this gray cloud is that new home sales are up 6.8% year-over-year.
Some of the stuff to keep your eye on this week:
- Case-Shiller Home Price Index
- Consumer Confidence
- Pending Home Sales
- Weekly Jobless Claims
- Consumer Spending Report
- University of Michigan’s consumer sentiment report
If I run across any more big news for housing, real estate or the economy, you know I will write about it. So be sure to subscribe below!