This week did not come with any real surprises in regard to the economic data that was reported. On the housing front, the two major reports released were for existing home sales and new home sales.
Existing home sales slipped in the month of February by .6% from the prior month as reported by the National Association of Realtors. Despite the drop, existing home sales are 7% higher than February of 2009.
New home sales unexpectedly fell more than expected. The report for February is the lowest number on record and represents a drop of 13% from the same period in 2009. However, there are factors in the report that are indicative that housing is not as bad as it appears.
Due to the major snow storms in the Northeast and Midwest, many buyers held off making purchasing decisions while waiting for the weather to improve. This is a major contributing factor to the decline reported. However, in the western region of the U.S. there was a 20.8% jump in new home sales which is a strong report compared to what we have seen lately.
Mortgage rates began their slow but steady increase as expected. The media as well as the Warrior Weekender have been reporting for quite some time that as the government phases out their treasury re-purchase program, bond yields will rise unless other investors step in to keep demand high. Unfortunately at this week's bond auctions we witnessed lower demand from investors for bond purchases, especially lack of interest from foreign investors. The result was an increase in bond yields of about 25 basis points.
In other economic news, first time jobless claims dropped slightly showing that unemployment is still a concern however at least for now, the job market is showing signs of stabilization. Although the employment situation is not yet showing signs of improvement, deterioration of the job sector has appeared to have ended.
The U.S. economy expanded at a 5.6 percent annual rate in the fourth quarter of 2009, and corporate profits climbed, setting the stage for gains in employment that may broaden and preserve the expansion.
The rise in gross domestic product, while smaller than the government's previous estimate issued last month, marked the best performance in six years. Company earnings increased 8 percent, capping the biggest year-over-year gain in a quarter century.
It is to be expected that in the coming months we will see positive and negative news however more than likely the trend will be a slow but steady movement toward economic growth.
Economic data to be released next week:
• Tuesday March 30th - Case-Shiller Home Price Index
• Wednesday March 31st - ADP Employment Report
• Thursday April 1st - Weekly Jobless Claims
• Thursday April 1st - Construction Spending
• Friday April 2nd - Employment Situation
Have A Great Weekend!
Your Mortgage Professional,
JJ Mack
916-517-1800 x300
916-390-2463
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