There was plenty of news last week that is going to affect real estate and mortgage rates. Here are some of the highlights…
Monday: Retail sales are a big part of our economy because they represent about 70% of the US economy. Retail sales for April increased to 0.1% from the March reading of 0.5%. This is much better than the idiots on Wall Street that predicted a decrease of 0.6%.
Tuesday: It isn’t only consumer confidence that is important for the economy. The National Federation of Independent Business just released their Small Business Optimism Index for April 2013 and it was GOOD! The April 2013 index increased 2.6 points to 92.1. A reading of 90.7 indicates economic recovery.
Wednesday: The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May matched investor expectations with a reading of 44. At three points above the March reading of 41, this report suggests that builders are slowly gaining confidence in national housing markets.
Thursday: The Commerce Department reported that Housing Starts fell by 16.5% in April to a seasonally-adjusted annual level of 853,000 from 1.02 million housing starts in March. They are blaming this decrease on the volatile apartment construction sector.
Friday: Consumer sentiment for May surpassed investor expectations of +0.3 percent and came in at +0.6 percent. As consumer confidence grows stronger, it is more likely that more people will buy homes.
Rising Interest Rates Show Strengthening Economy
Mortgage rates rose last week according to Freddie Mac and the MBA.
As the economy recovers, it is very likely we will see mortgage rates go up. Exactly how much & when it is hard to say. Some say that the great opportunity of affordable home prices and low mortgage rates may be coming to an end. I wouldn’t panic just yet.
Federal Open Market Committee Minutes To Be Released This Week
Looking ahead, economic news for this week includes the Existing Home Sales report for April with an expectation of 5.00 million homes sold on a seasonally-adjusted annual basis against the March tally of 4.93 million homes sold. While this is important news for the economy and US real estate market, remember that real estate is local. You can see the local market conditions by reading the Weekly Snapshots and the Monthly Reports.
Also set for release on Wednesday are the minutes from the latest Federal Open Market Committee. The FOMC meetings typically include discussions of the Federal Reserve’s current policy on quantitative easing (QE) which consists of the Fed buying $85 billion per month in MBS and treasury bonds.
This is super important for real estate because when the QE program ends, mortgage rates will likely increase as bond prices decline due to lesser demand.
Thursday brings the weekly Jobless Claims Report along with New Home Sales for April. The consensus for new homes sold is 430,000 as compared to the March reading of 417,000 new homes sold.
The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, will release its Home Price Index for March on Thursday. Again this is for the entire US but important none the less.
All of these can and probably will have an effect on mortgage rates and the housing market. I will keep you updated on how each of these are going to affect the real estate market in the Anderson SC area!