The Home Buyer's Korner

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July 22nd, 2013

What Home Buyers Need To Know for July 22th, 2013

Guy looking up in colorLast week’s economic news effecting home buyers was a mixed bag with retail sales and housing starts that came in lower than expected, however home builder confidence in the housing markets across the country continues to remain strong.

Weekly jobless claims fell for the week ending July 13th, and Fed Chair Ben Bernanke testified before the Senate.  In his testimony, Bernanke pointed to falling gold prices as a strong indication of an increasing confidence in the economy, but that it was “way too soon” to say when the Fed’s quantitative easing (QE3) program would be reduced. The news resonated with investors and appears to of claimed short term concerns that caused interest rates to increase earlier this month.

Last week:

Monday: Retail sales for June came in lower than expected at 0.4 percent. Economists estimated a reading of 0.9 percent based on May’s reading of 0.5 percent.

Tuesday: June’s Consumer Price Index (CPI) came in as expected at 0.5 percent against May’s reading of 0.1 percent.

The NAHB/Wells Fargo Housing Market Index (HMI) for July gained five points for a reading of 57, which exceeded expectations of a reading of 52. Builders cited short supplies of existing homes and falling materials prices as factors contributing to June’s strong reading.

Wednesday: Housing starts in June fell to a seasonally-adjusted annual rate of 836,000 against expectations of 950,000 and May’s revised reading of 928,000. Regional weather and a surplus of unused building permits were seen as contributing to fewer housing starts in June; analysts did not see the dip in housing starts as a sign of softening housing markets.

Thursday: Fed Chair Ben Bernanke testified before the Senate and was careful to emphasize that economic data received after the last FOMC meeting indicated that it is “way too soon” for the Fed to change its monthly purchase of Treasury bonds and Mortgage Backed Securities.

Freddie Mac reported that average rates for a 30-year fixed rate mortgage fell by 14 basis points to 4.37 percent; average rates for a 15-year fixed rate mortgage fell by 12 basis points to 3.41 percent; these rates include average discount points of 0.7 percent.  With the recent rise in mortgage rates many home buyers have found themselves facing higher mortgage payments for homes they might had been considering purchasing and looking for options.  One options could a FHA, VA or Conventional 5/1 Adjustable Rate Mortgage (ARM).  Many lenders offer rates at around 3.17 percent with discount point of 0.6 percent. The 5/1 ARM provides a fixed payment for the first five years (60 payments) with a 30 year amortization schedule and adjusts every 12 months thereafter based on a set index and margin. ARM Mortgages aren’t for everyone, but if you need a low fixed rate for now and don’t plan on living in your home for more than five years it’s worth discussing with your loan officer.  

What’s Ahead for the Week?

Monday we get Existing Home Sales.

Tuesday, the FHFA releases its Home Prices report.

Wednesday New Home Sales will be released.

Thursday brings us weekly Jobless Claims and the Durable Goods report.

Friday will finish with the Consumer Sentiment report.

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 our blog.  Here you’ll find real estate and mortgage professionals to assist you with all your home buying or selling needs.