What Home Buyers Need to Know for the Week of Sept 8, 2014
Last week’s housing-related economic news was lite, mostly due to the Labor Day holiday Monday. Tuesday, the U.S. Commerce Department reported Construction Spending for July increased by 1.80 percent, as compared to June’s revised reading of 1.0 percent and expectations of a 1.0 percent increase for the same timeframe.
The Federal Reserve released its Beige Book report on Wednesday; the consensus from businesses within the 12 Federal Reserve districts indicated that the economy was strengthening, as well as labor markets. Noteworthy me mentions were the nation faces a shortage of skilled workers; new construction and home sales grew modestly and fewer than half of the districts reported growth in real estate activity.
The report is consistent with other recent reports of falling home sales, mortgage originations and demand for homes. Bank analysts are saying that lenders remain wary of loosening mortgage credit standards without protection from having to repurchase faulty mortgages from Fannie Mae and Freddie Mac, which has a lot to the new qualified mortgage guidelines implemented by the consumer protection agency.
Freddie Mac reports average mortgage rates and discount points each Thursday and we saw little change last week. The average rates for a 30-year mortgage and a 5/1 adjustable rate mortgage were unchanged at 4.10 percent and 2.97 percent, while discount points remained at 0.40 percent. The average rate for a 15-year fixed rate mortgage fell by one basis point to 3.24 percent with discount points lower at 0.50 percent.
The Bureau of Labor Statistics Reported that 142,000 new jobs were added in August, while analysts expected 228,000. Many analysts said that the abrupt decline was an anomaly, ending a streak of months in which the economy added over 200,000 new positions. They pointed to a few short-term incidents that impacted both the retail and automotive sectors, as a large supermarket chain cut hours and fewer July layoffs in the automotive sector led to fewer workers called back in August. The unemployment rate remained at 6.10 percent.
Weekly jobless claims rose to 302,000 against expectations of 300,000 claims and 298,000 new jobless claims in the prior week.
What’s Ahead for the Week?