What Home Buyers Need to Know for the Week of January 6, 2014
The final week of 2013 wasn’t high in volume due to the New Year holiday, but it did suggest that the economic recovery is progressing and housing markets across the country is leading the way. The National Association of Realtors of pending homes sales showed a month-to-month reading of 0.20 as compared to October’s reading of -1.20 percent and the lowest reading for pending home sales in five months. Lawrence Yun, chief economist for NAR, said that “positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014.” November’s year-over-year reading for pending home sales was 101.7 against a reading of 103.3 for November 2013. The good news is that November’s reading exceeded a 10-month low of 101.50 for October 2013.
The S&P Case-Shiller 10 and 20 city home price indices for October was released Tuesday showed positive results for both indices, showing year-over-year gains in average home prices at 13.60 percent. On an un-adjusted basis, the 10 and 20 city indices each gained 0.20 percent between September and October and each showed a 1.00 percent gain in home prices on a seasonally adjusted annual basis. Case-Shiller cautioned that home prices are expected to rise at single-digit rates during 2014 as compared to double digit increases we saw in 2013.
December’s Consumer Confidence reading gained 6.1 points for a reading of 78.1 and exceeded the expected reading of 76.2. The prior two months had shown decreased in readings, thought to have been caused by the government shutdown in October. Consumers indicated that they are more confident about the economy than they have been in five and a half years! Housing and manufacturing are leading the recovery, due mostly to overall lower cost in energy the nation has been enjoying as compared to other industrialized nations.
The national unemployment rate stood at 7.00 percent last week, which remains 0.50 percent above the Federal Reserve’s targeted rate of 6.50 percent. Weekly jobless claims came in lower than expectations of 342,000, with jobless claims at 339,000 and the prior week’s reading showed 341,000 new jobless claims. Although a small decrease in new claims, last week’s reading continue to suggest that economic recovery is on track.
Thursday’s Freddie Mac mortgage interest rate survey showed incremental increases in mortgage rates; concerns over continued tapering of the Fed’s QE3 program may have been a factor in the slight uptick in last week’s rates. Average rates for mortgage loans rose as follows. The rate for a 30-year fixed rate mortgage increased from 4.48 to 4.53 percent with discount points rising from 0.70 percent to 0.80 percent. The rate for a 15-year fixed rate mortgage was 3.55 percent with discount points unchanged at 0.70 percent. The rate for a 5/1 adjustable rate mortgage rose by five basis points to 3.05 percent with discount points unchanged at 0.40 percent.
Economists seem to agree on continued improvement in the economy for 2014, however rising mortgage rates and high unemployment continues to remain the main obstacles to a faster economic recovery.
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.