Finally a week that I don't have to search for something good to say about housing or the economy as there was plenty of good news to go around. The housing market reported data that is the strongest we have seen in quite some time.
The report of a 6.8% increase in existing home sales shocked the market as the expectation was for a slight decline. After weeks of commentary that the homebuyer tax credit had lost its steam, it appears that the surprise increase in existing home sales was directly attributed to the soon to occur tax credit expiration on April 30th. After months of pondering whether they should purchase or not, it appears that buyers are making a mad dash to take advantage of the tax credit before it is gone forever. It is very clear that the government has no intention of extending the credit for a second time.
In more great housing news, new home sales reported an increase of 26.9% from the prior month. This report is the strongest we have seen since July of 2009. The hope is that this rising trend will continue however nobody will know exactly what role the tax credit is playing in these better than expected numbers until the reports for May are released..
The housing reports are certainly providing long overdue optimism for the real estate market. Time will tell whether the increases are a true reflection of an improving market, or simply an aberration based upon the tax credit expiration. Regardless of the reason, I am personally very excited about the real estate reports and I am optimistic about the future even though challenges to the market still remain.
Mortgage rates were very stable this week in the absence of any significant economic news. Despite the positive housing news on Thursday and Friday, mortgage rates did not react with any major movement. Concerns about the Greek debt crisis are weighing on the minds of many investors as evidenced by their recent purchase of U.S. treasuries which has been part of the reason that mortgage rates have remained low.
The stock market has continued its rally and no let up is in sight. In this past week we experienced 5 straight days of increases of the Dow Jones Industrial Average.
Next week will be a moderate week for news. Many of the reports are expected to show stability and not have any major impact on the markets.
• Tuesday April 27th - Case-Shiller Home Value Index
• Tuesday April 27th - Consumer Confidence
• Wednesday April 28th - FOMC Announcement
• Thursday April 29th - Jobless Claims
• Friday April 30th - Consumer Confidence
Your Mortgage Expert,
JJ Mack
916-517-1800 x300
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