The big news for real estate, housing and the economy from last week and what we need to keep an eye on. Plus a round up of real estate stories from around the web…
Surprise Surprise Surprise
Well we got a big surprise last week when the Federal Reserve decided NOT to taper Quantitative Easing. I have to admit they fooled plenty of people, myself included.
After last week’s Federal Open Market Committee meeting, Fed Chairman Ben Bernanke said that economic conditions had not improved enough to warrant a decrease in the federal quantitative easing program. The Fed also said that the target federal funds rate would remain at 0.00 to 0.25% until the national unemployment rate reached 6.50% and inflation reaches 2.00%.
Not sure why the Fed ever hinted about reducing QE since the national unemployment rate is 7.30% and the Fed thinks that inflation will stay under 2.00% through 2015.
Bernanke said that the Fed would take no action to reduce QE until the economy strengthens. Bernanke also said there will NOT be any automatic reduction of QE until the Federal Reserve thinks the US economy has improved sufficiently
Builder Confidence Higher
We did get news last week that home builders are still feeling confident. The National Association of Home Builders/Wells Fargo Housing Market Index for September came in at 58. Readings over 50 indicate that more builders are confident about market conditions than not.
This may be due to the August numbers for housing starts. The number of starts in August 2013 was 0.9% higher than July 2013 and 19.0% higher than the August 2012 level.
We will need to keep an eye on the effect of the Fed not tapering Quantitative Easing on mortgage rates this week. Both Freddie and the MB reported average rates decreasing last week. Check out Friday’s post for more details and analysis.
We have several BIG news events coming up this week:
- Case/Shiller Home Price Index for July 2013
- FHFA Home Price Index for July 2013
- New Home Sales Report
- NAR Pending Home Sales Index
- University of Michigan’s consumer sentiment index for September 2013
Look for more details about these stories later this week right here!
Check out some recent real estate stories from around the web:
Risky Business: Mortgage Lending Faces Big Risks
NAR About Lowering GSE Loan Limits: Don’t Lower the Loan Limits
Cha-Cha-Changes: Dynamic Shift in Housing Market
Good analysis: Four Factors to Watch in Housing’s Rebound
From FNC: Home Prices Up 0.7%
Cha-Cha-Changes: How Real Estate Changed 5 Years After Lehman Bros