Housing week came and went without much fanfare. As promised this was real estate reports week, and just like so many months past, the reports were very mixed.
The Housing Market Index, which measures the present and future anticipated health of new construction, showed that the state of new construction is moderate at best. Existing sales are slow and future sales appear to be slow as well. The bright spot in the report is buyer traffic has increased in recent weeks and that has builders hopeful about the future.
Housing Starts showed that although sales have not been where builders would like them to be, it is appears they believe things will improve. The increase in starts of 7.2% for the month of March was a drastic reversal of direction from February's decline of 18.5%. Overall the numbers remain at very low levels however any breath of optimism by builders will gladly be accepted.
The Mortgage Bankers Association reported that purchase applications jumped 10% in the week of April 15th and refinance applications increased 2.7%. The jump in purchase applications is believed to be related to both the recent drop in mortgage rates along with buyers rushing to apply for their home loan before the FHA Insurance Premiums take effect.
The National Association of Realtors reported that Existing Home Sales increased 3.7% from the prior month. Additional good news is that the average home price increased 2.2%. Home prices are still 5.9% lower than the same time last year however the gap in home prices between 2011 and 2010 seems to be closing. 35% of all purchases last month were "all cash sales". Additionally, 40% of all existing home sales were distressed properties.
First Time Jobless Claims are once again sitting back around the 400,000 per week. Last week there were 416,000 first time filers and this week it dropped 13,000 to 403,000. It seems that the gradual reduction of claims we had seen over the 1st quarter of 2011 has stopped. We are not experiencing significant increases in claims either which leads to a feeling that maybe the job market is stabilized.
The stock market has recovered nicely since last week as it has risen over 300 points for the week. The markets will be closed for Good Friday. As mentioned in last week's report, corporate profits were being released this week. The profit reports have been mixed.
Lastly, President Obama announced this morning that the overall health of the economy is improving however real estate continues to be a major drag on the economy. (I guess our President has not had to gas up his car recently to realize that skyrocketing gas prices are having a major impact on consumer spending habits)
Despite gas prices and housing, the economy continues to chug along growing little by little. Companies are hiring, raises are starting to come back into the picture, and overall company profits are improving. Even college graduates are starting to find jobs.
Reports due out next week are:
• Monday April 25th - New Home Sales
• Tuesday April 26th - Consumer Confidence
• Wednesday April 27th - MBA Mortgage Applications, Durable Goods Orders, FOMC Announcement
• Thursday April 28th - GDP, First Time Jobless Claims and Pending Home Sales
Your Mortgage Consultant,
JJ Mack
916-517-1800 x300
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