This week the housing market received a mixed bag of both positive and negative reports (this is nothing new). On the positive side as we break down the reports below we can see that there are certainly signs of economic improvement. On the negative side evidence still remains that we are far from being out of the woods and reminders continue to appear of just how fragile the economy still is.
In a welcome surprise, housing starts jumped 1.6% from February as builders increased filings for new construction permits. This increase beat forecasts and was welcome considering the decline reported in the prior month.
Foreclosure reporting this week was mixed in that actual home repossessions by banks dropped for the first time in four years. On the flip side of the coin, unfortunately in the first quarter of 2010 foreclosure filings rose 7%. Additionally, foreclosure filings were reported 16% higher than for the same period in 2009.
At long last there is some positive news coming from the Obama administration's loan modification program. Month after month there are an increasing number of homeowners being moved from trial modifications into permanent ones. The process of obtaining a modification still remains challenging however the banks are certainly showing signs of being able move the process faster than ever before.
In other economic news, the mixed reports of recovery continue to come out.
• Retail sales increased by a more than expected 1.6% where as the consensus was that the increase would be 1.3%. Slowly consumers are opening their wallets and making purchases that go beyond bare necessities.
• Industrial production rose .1%. An increase of .8% was anticipated however any increase is still welcome.
• Fed Chairman Bernake announced that the economy continues to recover at a very slow pace and the government expects to keep interest rates low for some time and that no increase is forecast at the present time.
• The 10YR Treasury security has dropped back to 3.81% from a high of 4.00% and mortgage rates have also declined from their recent highs as well. Demand for treasuries remains strong as continued concern over Greece's debt crisis is keeping downward pressure on bond yields.
• Consumer prices increased 2.3% which was driven up primarily by rising energy costs. When you factor out the energy prices, the core CPI rose only.1% once again showing that inflation is not an issue at the present time.
Next week will be for the most part a quieter week however important housing data will be released on Thursday and Friday:
• Thursday April 22nd - Producer Price Index, Existing Home Sales and Jobless Claims
• Friday April 23rd - New Home Sales
Your Mortgage Professional,
JJ Mack
916-517-1800
916-390-2463
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