HAPPY NEW YEAR
What Home Buyers Need to Know for the Week of December 30, 2013
The New Year shows promise of steady economic improvement given the latest New Home Sales Report and it’s possible that improving housing markets will continue to lead the way in the economic recovery. The U.S. Commerce Department provided housing markets good news with its New Home Sales report for November at 464,000 new homes sold; against expectations of 440,000 units. The expectation was based on the original reading of 444,000 new homes sold in October, which was also revised to 474,000 units. The latest reading for October was the highest since July of 2008 and Home Builder Confidence recently achieved its highest reading since 2005, a further indication of overall economic recovery in the housing market.
Durable Goods Orders reached their highest level since May with November’s reading of + 3.5 percent. Economists expected an overall increase of 2.0 percent for overall durable goods orders. Without the volatile transportation sector, the reading for November was +1.2 percent. This could be a sign of economic recovery for manufacturing, as more orders are being placed.
The University of Michigan’s Consumer Sentiment Index was improved for December at 82.5, after the November reading was adjusted from 82.5 to 75. Analysts noted that consumers were relieved when legislative gridlock ended.
After the Christmas holiday, the Weekly Jobless Claims report came in with a reading of 338,000 new jobless claims filed. This reading was lower than expectations of 345,000 and significantly lower than the previous week’s report of 380,000 new jobless claims. This was the largest decrease in new jobless claims since the week of November 17, 2012. Analysts expect new jobless claims to decrease at a slower rate in early 2014.
Freddie Mac released its Primary Mortgage Market Survey on Thursday. Although some economic analysts had expected a jump in mortgage rates after the Fed announced its plan to begin tapering its monthly securities purchases in January, mortgage rates showed little change. The average rate for a 30-year fixed rate mortgage rose by one basis point to 4.48 percent with discount points unchanged at 0.70 percent. Average 15-year mortgage rates also rose by one basis point to 3.52 with discount points moving up from 0.60 to 0.70 percent. The average rate for a 5/1 adjustable rate mortgage rose by 4.00 basis points to 3.00 percent, with discount points unchanged at 0.40 percent.
While rising mortgage rates slowed home purchases during the summer, analysts note that home buyers seem to be adjusting for higher mortgage rates by purchasing smaller homes in less costly areas.
If you’re interested in learning more about home ownership in your city be sure to visit “The Home Buyer’s Korner” to the right of our blog. Here you’ll find great information from local real estate agents, mortgage lenders and general contractors to assist you in your path to home ownership.
What’s Ahead for the Week?
Pending Home Sales for November was earlier this morning.