"Reality is the leading cause of stress amongst
those in touch with it." Lily Tomlin. The reality of the
2014 housing market is quite different than last year's, according
to recent housing reports.
New Home Sales
for March plunged by 14.5 percent from February to an annual rate of 384,000
units. This was far below the 455,000 expected and the lowest level since July.
New Home Sales in March were down 13.3 percent from the same period last year.
Existing Home Sales for March didn't fare much better, as they declined by 0.2
percent from February to an annual rate of 4.59 million, just below expectations.
This was the slowest pace since July 2012.
In other housing news to note, the Federal Housing Finance
Agency (FHFA) reported that its February Home Price Index (HPI) rose by
6.9 percent from the same period last year. This was the weakest reading in 13
What does this mean for home loan rates? Typically good news helps Stocks improve
at the expense of Bonds, including Mortgage Bonds (the type of Bonds on which home loan rates are
based). However, Bonds and home loan rates were able to benefit last week from
the increased tensions between Russia and the Ukraine. This caused investors to
move their money into the safe haven of Bonds, helping Mortgage Bonds and home
loan rates improve.
Whether these improvements continue could be
contingent on several potentially market-moving items in the coming week,
including the Jobs Report for April and the Fed's next meeting of the
Federal Open Market Committee. Remember that the Fed is now purchasing $30
billion in Treasuries and $25 billion in Mortgage Bonds to help stimulate the
economy and housing market. This is down from the original $85 billion per
month that the Fed had been purchasing. It will be important to see if the Fed
announces additional tapering of these purchases at its upcoming meeting.
Author:Braden Campbell Phone: 803-609-7641 Dated: April 29th 2014 Views: 936 About Braden: Let me start off by saying how proud I am to be a part of the SC Exit Realty family. After being ...
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