Weekly Housing and Market Update

QUOTE OF THE WEEK… “The only thing that should surprise us is that there are still some things that surprise us.” –Francois de La Rochefoucauld, French author of maxims and memoirs

INFO THAT HITS US WHERE WE LIVE… Some observers were indeed surprised to seesales of new single-family homes jumped 35% from December to January. This put them at a seasonally adjusted annual rate of 543,000, according to the Mortgage Bankers Association (MBA). Their chief economist explained, “While the big jump may appear to conflict with other data,…our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes.” In line with this, the MBA put mortgage applications for new home purchases up 27% over December.

Also surprising, particularly to those fearing another home price bubble, the National Association of Realtors (NAR) reported that nationally, the NAR housing affordability index shows that, excluding the last five years, homes in the U.S. as a whole are still more affordable than at any time since at least 1981. This was part of an article in the Wall Street Journal, which also said that the NAR found, “…the monthly mortgage payment as a share of median incomes remains unusually low. On a payment-to-income basis, then, home prices still look undervalued.” 
BUSINESS TIP OF THE WEEK… Don’t buy into the idea that cold calls are a thing of the past, because today’s customers will always find you. Adopt new marketing approaches, but don’t abandon successful lead generation tactics like cold calls.

>> Review of Last Week

BEST WEEK SO FAR… Stocks posted their best gains of the year last week, as investors who feel good about our economic prospects prevailed over those with the opposite point of view. All three major stock indexes saw solid gains, with the tech-heavy Nasdaq leading the way, hitting its highest level since July 2000. That was right after the Nasdaq closed at its all-time high on March 10, 2000. Those who shrugged off the week’s largely disappointing economic data blamed it on the winter weather, ignoring the fact that many reports are seasonally adjusted! 

The disappointments were led by Retail Sales, down 0.4% in January, following a 0.1% dip in December. But if you excluded volatile auto sales, January retail came in unchanged, after increasing 0.3% the month before. Initial weekly jobless claims were up a little and continuing claims were down a bit, so there were no signs of any new strength building in the labor market. Industrial Production and Capacity Utilization were both down in January, but University of Michigan Consumer Sentiment impressed to the upside for February.

The week ended with the Dow up 2.3%, to 16154; the S&P 500 up 2.3%, to 1839; and the Nasdaq up 2.9%, to 4244.

As usual, the stock buying was accompanied by bond selling. This drove prices down, as Treasuries logged their first weekly loss in six and the FNMA 3.5% bond we watch finished the week down .87, to $100.30. Nevertheless, following a week of light economic reports, national average fixed mortgage rates were largely unchanged in Freddie Mac’s Primary Mortgage Market Survey for the week ending February 13. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… Barclays Securitized Products Research reports that since 2011-12, there’s been a sustained recovery in the housing market, with prices up 20-25% over Q1 2012 and existing and new home inventories now below pre-crisis levels.

>> This Week’s Forecast

FEWER HOUSING STARTS AND EXISTING HOME SALES, INFLATION OK, A LOOK AT FED MINUTES… Economists expect Housing Starts to moderate in January, along with Existing Home Sales. But, hey, they’re also forecasting inflation to stay in check, both for businesses (Producer Price Index) and for the rest of us (Consumer Price Index). Wednesday, we’ll see if the FOMC Minutes from the Fed’s last meeting reveal anything that new Chairman Janet Yellen didn’t share with Congress last week.

Stock and bond markets are closed Monday, February 17, for Presidents’ Day.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. 

Source; Rebecca Hansen; Guild Mortgage
Contact Jeff Hansen

About Jeff Hansen, Realtor in Colorado

Search for homes here; www.jeffhansen.remax.com for FREE. Licensed Real Estate broker with RE/MAX Professionals at 10135 W. San Juan Way, Littleton, Colorado 80127. I have been a Realtor Since 1992 and provide Free Real Estate Advice Realtor in Littleton, Colorado and the Metro Denver Area, A Real Estate investment company focusing on the buyers and sellers of homes, also including fix and flips and rental properties, Listings and all sales of realty. (303)794-4530 Disclaimer I will not receive any compensation or take on any liability because of any conversation on this or any related web page w/o any written brokerage agreement. And there will be no relationship actual or implied because of any conversation on this or similar pages. No written agreement, therefore. AND Differ from state to state, so check your state's rules.
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