We have all the heard the expression "you must seize opportunity when it presents itself". Well...that is exactly what I am going to do right now. There is finally some good news about housing and I am going to write about it.
I am excited to announce that for the first time in many, many months, we experienced an increase in mortgage applications for both purchases and refinances. The MBA reported that purchase applications increased by 7% while refinance apps went up 6%. Mortgage rates remain incredibly low and most likely the absence of stock market insanity helped to move homebuyers in to making a decision to purchase.
In addition, reports from real estate and mortgage professionals all over the country are coming in showing that activity in real estate has dramatically increased. Many people that I personally spoke with from coast to coast have indicated a significant jump in homebuyer activity. ("Now that's what I am talkin about")
Next week is what I like to call real estate report week. Get ready for a barrage of real estate data regarding new construction, house values, existing home sales and mortgage applications. As much as you know that sometimes I can be a cynic, regardless of what the reports say next week I am going to remain optimistic about housing because as far as I'm concerned, next week's housing reports will be old news.
Next week's housing data will be for the month of August. Being a mortgage professional I can tell you that I would be shocked if these reports come in at all positive. The August real estate market was very slow in most parts of the country and I don't expect the reports to reflect anything much different than that. However, that was then and this is now... and now is looking better than it has in a very long time.
I have always said that the economists need to consult with real estate and mortgage professionals in the street to know what is really happening in the market. They always talk to the bean counters that sit behind a desk all day looking at a computer screen. I consider myself and expert in real estate and I can say for certain that there has been a jump in real estate activity this month and that is going to be reflected in next month's reports. (It feels soooo good to be writing positive news about housing and I am not going to let any other news ruin my mood)
Other reports about the economy remained mixed. Inflation on the wholesale level has eased significantly. Despite the fact that consumer prices on the retail level show inflationary pressure, it is likely that the wholesale price decrease this month will translate into reduced retail inflation next month.
Unfortunately First Time Jobless Claims seem to be on the rise again. Not only did we see that last week's numbers were revised upward by 3000 claims, this week claims jumped another 11,000 to 428,000 which is the highest we have seen in quite some time. Lately I have been hearing on the news that some large companies have started laying off people and that more layoffs may be on the way. Bank of American announced they will be cutting jobs by 30,000 over the next couple of years.
I have said it before and I will say it again, housing is a driver for the economic recovery. Let's keep our fingers crossed that increased activity is real, as I believe it is.
