Recapping the big news for real estate for the week of 8-5-2013 and looking at what we need to keep an eye on in the week ahead…
We did get some good news last week so let’s dive right in:
Pending Home Sales:
You might want to file this one under counting chickens before they hatch. Last week, NAR reported that the number of homes under contract dropped in June 2013. NAR is blaming rising mortgage rates and tight inventory.
However mortgage rates are still super low and if you look locally, you may be surprised to find a lack of inventory in certain price ranges/areas. I suggest talking to your lender and a trusted local real estate expert to find out what is really happening in your area.
Home Prices Increase Again:
One of the most watched home price reports was released last week. The good news is that the S&P Case-Shiller Home Price Indices reported that USl home prices increased by 12.2% annually. Home prices in all 20 cities used in the Case-Shiller 10 and 20 city home price indices increased. However, the average US home price is still about 25% below the peak back in 2006.
Sadly not all the news last week was good. Consumer confidence dropped in July 2013 from the June 2013 level. If we are looking for something to blame we can point to increasing mortgage rates and still too high unemployment numbers. Despite the low mortgage rates and affordable home prices, it is hard for some people to muster the confidence to make large purchases.
The Fed Speaks:
I guess we should be glad that last week’s news from the Fed did not cause wide spread panic or mortgage rates to spike. The FOMC said that because economic conditions are still bad, they are not setting a date to start tapering Quantitative Easing. We know it is only a matter of time before QE ends though.
Remember that Quantitative Easing or QE is probably the biggest reason for the super low mortgage rates we have enjoyed for so long. And when the Fed stops or tapers QE, you can expect mortgage rates to increase.
Big news for the economy came from ADP last week. They reported that job growth for private-sector jobs was better than what most expected. Also the number of jobs added in July 2013 was better than June 2013.
Weekly jobless claims came in at 326,000. This was lower than expectations and the previous week’s reading. I have been saying that we are going to have to see real improvements in the employment numbers if we are ever going to see a real sustainable recovery in real estate.
As I usually do, I posted the weekly Mortgage Rate Update on Friday. This week we saw rates continue to bounce around with some rates increasing and some rates decreasing. No big changes in the average mortgage rates but this was before Friday’s Job’s Report. Follow the link and check out the chart porn from Freddie Mac and the FHFA to see what rates have been doing.
More About Unemployment:
On Friday we got the Non-farm Payrolls report for July 2013. Sadly it was NOT as good as expected and like I keep saying, high unemployment is hurting both the economy and the housing market. The US unemployment rate for July was 7.40% and was slightly lower than June’s reading of 7.60%.
Not as much big stuff this week as last week. The stuff to keep your eyes on for this week includes:
- Senior Loan Officer Survey on Monday
- US Trade Deficit and Job Openings reports for June on Tuesday.
- Consumer Credit report on Wednesday
- Weekly Jobless Claims on Thursday
- Freddie Mac’s mortgage rate report on Thursday
I am not aware of anything for Friday so maybe we can really mean it when we scream TGIF?