housing market - feds leave rates unchanged this week

Please enjoy this quick update on what happened this week in the housing and financial markets.

	The Fed concluded the most recent FOMC meeting and announced there would be no policy rate increases. The next FOMC meeting is scheduled for March 14/15.
	Economic activity in manufacturing expanded in January, surpassing economists' expectations. Manufacturers grew at the fastest pace in more than 2 years.
	The Consumer Confidence Index dropped in January after reaching a 15-year high in December. Despite the slight drop, consumers remain confident overall.

	Construction spending was down slightly overall in December. However, spending on residential structures was up 0.5%.
	Despite an increase in mortgage rates, pending home sales rose 1.6% in December compared to November. Sales were up 0.3% year-over-year.
	Home prices continue to rise, up 5.6% in November according to Case-Shiller. Increases are supported by rising personal income & decreasing unemployment.

When an employment application asks who is to be notified in case of emergency, I always write, “A very good doctor."

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

Sincerely,

Christopher Gianino
Pinnacle Real Estate Advisor by Gershman Mortgage
Vice President
NMLS 252641
(314) 280-5662
cgianino@gershman.com
www.PinnacleRealEstateAdvisor.com

this week in the housing and financial markets

what's happened this week in the housing and financial markets. Recent economic data showed signs of underlying inflation. Combined with strong housing and labor markets, this could contribute to higher mortgage rates. However, the latest Fed commentary urged caution, sharing intent to raise policy rates but not until later this year. This could help near term to keep rates steady. Another factor that could help keep rates low is recent retail sales. February's weak sales could signal weakness in the economic outlook, helping rates. Housing starts hit a 5 month high in February as builders ramped up construction. Single-family housing projects surged 7.2% to the highest pace in over 8 years. Building permits were down slightly from January to February, but still up 6.3% over the previous year. Permits for single-family homes rose 0.4% to 731,000. Builder confidence in housing remains strong, noting a continued demand for new inventory. Builders are struggling with enough labor and land to meet the demand. O'Reilly is walking through a graveyard when he comes across a headstone with the inscription, "Here lies a politician and an honest man." "Faith now," exclaims O'Reilly, "I wonder how they got the two of them in one grave!" Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

David Sharp
MiMutual Mortgage
Loan Officer
NMLS# 280482
(314) 260-4360
dsharp@mimutual.com
www.mimutual.info/dsharp
Click Here to Review Comments from Past Clients on Zillow

 

This week in real estate

 

	Solid domestic consumer demand helped 3rd quarter GDP estimates to increase 1.5%. Strong economic news can lead to higher rates.

	As expected, the Fed did not raise policy rates at this month's FOMC meeting. However, the statement contained language making a hike in December possible.

	The four-week average for jobless claims is the lowest since 1973. A strong labor market helps strengthen the economy and could lead to higher rates.

	New home sales fell in September after two straight months of gains. However, the drop is seen as temporary, and demand for housing remains strong.

	In fact, the homeownership rate rose between July and September, the first rise after 7 quarterly declines. Buyers under 35 years old had the highest increase.

	First time homebuyers are depending less on gift funds for down payments. More young buyers are using personal savings for down payments and closing costs.

Big Housing Demand for first time home buyers

According to US News: One reason that single-family construction will grow in 2015 is the expected unlocking of housing demand among prospective first-time home buyers. The market share of first-timers for both new and existing home sales has been weak in the past few years. While first-time purchases typically make up about 30 percent of newly built home sales, industry surveys suggest that this share was less than 20 percent in 2014.  The signs suggest 2015 will be positive for housing, which in turn will generate benefits for the overall economy.

http://www.usnews.com/opinion/economic-intelligence/2015/01/14/housing-market-showing-signs-of-a-good-2015