Mortgage rates over the last couple of weeks have been dropping!

Mortgage rates over the last couple of weeks have been dropping!

It may have taken sever years, but the real estate market is closing in on getting back to a stable healthy market.  2013 was the rebound year for housing in that the industry marked the highest level of sales since the housing boom year of 2006.

The National Association of Realtors reported that 5.1 million previously owned homes were sold in 2013 which is an increase of 9.2% from 2012 and up nearly 20% from 2011.  December sales were up slightly from November.  As reported by most mortgage and real estate professionals, it is likely that January and February closings will decline due to a lack of purchase activity in December.  The good news is that these same professionals are reporting a surge in early purchase activity in January which should lead to more improvement in the housing data for March and April.
 

One slight concern about housing in the coming months is that inventory of available homes for sale has fallen sharply.  In November home supply was estimated at 5.1 months.  In December the supply declined sharply down to 4.6 months. The cold weather gripping most of the nation may very well be partly to blame for the significant decline.

Mortgage rates over the last couple of weeks have been dropping as the economic data has been rather lackluster and investors have been pulling out of the stock market more than usual and placing their money into government bonds.  The decline in mortgage rates is not very significant but it is certainly enough to increase refinance activity.
 

The Mortgage Bankers Association reported that for the week of January 17^th refinance applications jumped 10%.  Applications for purchase applications declined by 4% however many believe that incredibly cold temperatures along with major snow storms in the Northeast have played a role in slowing purchases.

The run up in home prices that took place in 2013 appears to be slowing.  The Federal Housing Finance Agency reported on Wednesday that home prices in November rose only a slight .1%.  This is the 22^nd consecutive monthly increase in home values however it is the smallest increase we have seen in almost 2 years.  Home prices are still 7.6% higher than the same time in the prior year.  Most real estate professionals remain very optimistic about the housing market in 2014.  Many believe that we are just returning to a more stable market demand and flow rather than spiking trends like we experienced in the summer of 2013.

JJ Mack

916-517-1800x 300
jj.mack@apmortgage.com
www.apmcroseville.com

The recent drop in mortgage rates created a surge in loan applications!

The recent drop in mortgage rates created a surge in loan applications!

It has been a rough and tumble week in the markets.  Although there were only a few economic reports released during the week, corporate earnings and projections seemed to play the most on the emotions of investors.

The Dow Industrial Average started the week at 16,424.  With a decline to as low as 16,254 and with a peak as high as 16,500, by the end of the trading day on Thursday the market closed almost exactly where it started at 16,417.

The roller coaster started the early part of the week on the upswing with the retail sales report coming stronger than expected.  In December the index rose .2% which was better than expected.  When you factor out gasoline and auto sales the index rose .6%.  The surprise comes in two places.  The holiday shopping season was slower than hoped by most retailers.  Combine that with the poor unemployment report from last week, the surprise was that retail increased at all.

The poor unemployment report had investors thinking mid week that the Fed may slow down the planned tapering of the government stimulus plan.  The irony of the whole stimulus focus is that mid last year the markets tanked when the Fed discussed starting the tapering.  In today’s market mindset investors want the Fed to taper the program.  The belief is that the tapering means the economy is healthy and growing which is good news for investors. 

To prove once again just how sensitive home owners and home purchasers are to interest rates, the recent drop in mortgage rates created a surge in loan applications according to the Mortgage Bankers Association.  Rates have been declining slightly over the last 2 weeks which created a 12% surge in mortgage applications for home purchases.  Home owners who have still yet to refinance elected to jump on the rate drop as well with refinance applications surging 11.0% for the week of January 10^th.

On Friday on the report on housing starts will be released at 8:30AM.  The expectations for the report is a decline in starts after a 22.7 jump in November.  The reason for the expected decline is that in November the number of permits filed to begin construction declined 3.1%.  Typically when there is a decline in permits in the prior month, the following month housing starts declines.

The privacy of the American consumer is fast becoming the hot topic.  After the latest security breach at target in which data from over 110 million consumers was stolen, privacy fears are growing like wildfire.  So much so that there was an article on CNNMoney.com that discussed growing fears of lack of privacy inside our motor vehicles.  Seriously, between GPS devices, smart phones, internet service providers, traffic light cameras, security cameras, store cameras…. Do you think the word “privacy” even exists? (Latest estimates are that our pictures are taken a minimum of 300 times a day)

JJ Mack
916-517-1800 x 300
JJ.Mack@apmortgage.com
www.apmcroseville.com

Mortgage rates for the most part have show little movement the last 2 weeks!

Mortgage rates for the most part have show little movement the last 2 weeks!

The stock market has been trading in a narrow range all week.  With a lack of any real market moving data this week it seems that all eyes are on today’s unemployment report being released at 8:30AM.  What increased the focus on employment data is that on Wednesday the Federal Open Market Committee released the minutes from their last meeting.  In the report it is clear that the Fed is watching very closely the labor markets to determine at what pace they will continue to taper the economic stimulus program.

As everyone knows by now the Fed has reduced their bond buying program by 10 billion a month starting with this month.  There is no set time table or schedule for future reductions as of right now and the employment reports, both today and in the future, are expected to play a major factor in the Fed’s monetary policy decisions in 2014.

Although the Fed and investors place most of the focus on today’s national employment statistics released by the department of labor, on Wednesday the ADP Employment Report was released.  ADP estimated 238,000 private payroll jobs were created last month.  This was slightly higher than expectations.  The stock market moved into positive territory on Wednesday based on this news however response was tempered due to ADP’s poor track record of employment predictions over the last year.  Truth be told, ADP estimates have been more in line with the national reports over the last few months however it seems that investors have not yet gotten over the massive employment miscalculations from ADP over the last few years.  First time jobless claims continue to remain in the 330k range.

(The expectation for the Employment Report this morning is that the unemployment rate will remain at 7.0% and that the economy will add approximately 200,000 new jobs.)

The big question is what is Congress going to do about the 1.3 million people that lost unemployment benefits on December 28th?  As is typical, both sides of Congress are not in agreement on what to do and the American public is caught in the middle.

Mortgage rates for the most part have been flat for the last 2 weeks.  Minor movement up and down has occurred but overall the rise in mortgage rate towards the end of 2013 is playing a role in housing.

Applications for purchase applications declined 1% in the prior week.  According to the Mortgage Bankers Association applications for purchase loans is down a whopping 20% from the same time last year.  Applications for refinances tipped up last week by 5% but that is not very significant since the total number of people refinancing at this point is much lower than in months and years past.

JJ Mack
916-517-1800 x 300
jj.mack@apmortgage.com
www.apmcroseville.com