March comes in
like a lion and goes out like a lamb. As
March comes in this year, the housing sector continues to roar ahead with good
news, while other sectors are struggling. Read on to learn the latest details,
and what they mean for home loan rates.
Despite the harsh weather, New Home Sales rose
by 9.6 percent from December to January to an annual rate of 468,000, well
above expectations. The 468,000 rate was the highest level since July 2008.
Pending Home Sales for January also came in just above expectations and well
above December's reading. In addition, research firm CoreLogic reported that
completed foreclosures fell by 19 percent from January 2013 to January 2014,
while the Case Shiller 20-city Home Price Index ended its best year since 2005.
other end of the spectrum, the second reading for 2013 fourth quarter Gross
Domestic Product (GDP) was, in a word, gross. GDP fell to 2.4 percent from the
initial reading of 3.2 percent, sharply beneath the 4.1 percent recorded in the
third quarter of 2013. The decline was due in part to consumer spending and
exports that were less robust than initially thought, signaling U.S. economic
growth remains choppy. However, there was some good news in the report as
company spending was revised up sharply, suggesting an improvement in business
labor market news, weekly Initial Jobless Claims rose by 14,000 in the latest
week, reaching a one-month high as the job markets continues their up and down
pattern. The labor market has been choppy lately, especially after the anemic
number of job creations in December and January.
What does this mean for
home loan rates? Remember that the Fed is now purchasing $35 billion in
Treasuries and $30 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.
With the December and January job creation numbers far below expectations, the
Fed will be looking closely at February's numbers for any signs of a pattern.
If this report and other key economic data points are weak, the Fed may have to
rethink the tapering it has begun. This story is sure to impact the markets and
home loan rates as we move ahead in 2014.
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:Tami Houmiel Phone: 803-606-8712 Dated: March 3rd 2014 Views: 1,413 About Tami: ...
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