Time for a
change. With spring officially here, the change of season
will hopefully lead to a change of direction for the housing market, as the
harsh winter weather contributed to several disappointing reports.
February Existing Home Sales fell by 0.4 percent
from January to 4.60 million units on an annualized basis. While this number
was in line with estimates, it was 7.1 percent below the 4.95 million units
registered in February 2013. The National Association of Realtors cited the
unusually harsh winter weather, tightening of credit, and higher home prices as
the cause behind the stagnant sales data.
harsh weather was also blamed for the weak Housing Starts reading for February,
which came in at 907,000, making this the third straight monthly decline. In
addition, the National Association of Home Builders Housing Market Index came
in at 47 for March. Readings below 50 indicate that more builders view
conditions as poor, rather than good. On a positive note, Building Permits,
which are a sign of future construction, surged by 7.5 percent to 1.018
million. It will be important to see if readings improve once the weather
becomes milder around the nation.
other news to note, weekly Initial Jobless Claims rose by 5,000 in the latest
week to 320,000. Claims continue to hover near lows seen in November, as the
labor markets work through the post-recession malaise. The 4-week moving
average, which irons out seasonal abnormalities, came in at 327,000, the lowest
level since the end of November.
What does this mean for
home loan rates? Despite some weaker than expected economic reports,
the Fed announced more tapering to its Bond buying program. Beginning in April,
the Fed will purchase $30 billion in Treasuries and $25 billion in Mortgage
Bonds (the type of Bonds on which home loan rates are based) to help stimulate
the economy and housing market. This is down from the original $85 billion per
month that the Fed had been purchasing. I will be watching closely to see how
this decision impacts the markets and home loan rates as we head further into
The bottom line is that now
remains a great time to consider a home purchase or refinance, as home loan
rates remain attractive compared to historical levels. Let me know if I can
answer any questions at all for you or your clients.
Author:Mark Kroske Phone: 803-920-3744 Dated: March 24th 2014 Views: 2,023 About Mark: I was born in Pittsburgh, PA and was thankfully transplanted to SC at a young age. I grew up in Gree...
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