Sep 19, 2012 | Housing Analysis
Home builder confidence continues to make new highs.
As reported by the National Association of Home Builders, the Housing Market Index, a measure of builder confidence, rose to a reading of 40 in September — its highest mark since June 2006.
The index is now higher through five straight months and 11 of the last 12.
For home buyers in Worcester County area , the survey may be signaling higher new home prices ahead; when builders are more confident in housing, they’re may be less likely to make concessions in price, and to “sweeten” deals with free upgrades and/or subsidized mortgage rates.
The Housing Market Index is published monthly, based on responses to a 3-question survey that the NAHB sends to its members. The questions cover three distinct parts of a builder’s business, each requiring a simple, one-word answer.
Builders are asked to respond with “Good”, “Fair” or “Poor”; or, “High”, “Average”, “Low” to the following three comments :
- Rate market conditions for the sale of new homes today
- Rate market conditions for the sale of new homes 6 months from today
- Rate the foot traffic of prospective new home buyers
All three survey components showed an increase from August with buyer foot traffic rating at its highest point in more than 6 years. This is especially noteworthy because as the number of prospective buyers increases, so does competition for homes for sale.
There are currently just 142,000 new homes for sale nationwide, the stock of which will “sell out” in 4.6 months at the current pace of sales.
Not since October 2011 has the national home supply been above six months, the consensus dividing line between bull and bear market. Today’s new construction market favors builders and builders know it.
If you’re planning to buy new construction in Massachusetts later this year or into early-2013, consider moving up your time frame. Homes may be for sale, but they won’t likely be as inexpensive as they are today.
Sep 18, 2012 | Housing Analysis
The national market for foreclosed homes remains strong.
According to foreclosure data firm RealtyTrac, foreclosure activity increased 1 percent in August as compared to the month prior, climbing to just above 193,500 units nationwide.
1 in every 681 U.S. households received some form of foreclosure filing last month where a “foreclosure filing” is any one of the following foreclosure-related events : A default notice on a home; a scheduled auction for a home; or, a bank repossession of a home.
Default notices climbed in August which indicates that more U.S. homeowners are falling behind on payments.
However, for the 22nd consecutive month, the number of bank repossessions fell. This suggests that lenders are reaching alternative outcomes to foreclosure more frequently, and with more success, reducing the number of homes for sale nationwide.
Fewer homes for sale is one reason why U.S. home prices have been rising.
Like everything in real estate, though, foreclosures are a local event. In August, just six states accounted for more than half of the country’s bank repossessions. Those six states — California, Florida, Georgia, Illinois, Michigan and Arizona — account for less than 31% of the U.S. population. (more…)
Sep 17, 2012 | mortgage-rates-whats-ahead-september-17-2012
Mortgage markets improved last week as the Federal Reserve introduced new economic stimulus. The move trumped bond-harming action from the Eurozone, and a series better-than-expected U.S. economic data.
The 30-year fixed rate mortgage rate dropped last week for most loan types, including for conforming, FHA and VA loans. 15-year fixed rate mortgage rates improved, as well.
Mortgage rates are back near their lowest levels of all-time.
Last week’s main event was the Federal Open Market Committee’s sixth scheduled meeting of 2012. Wall Street expected the Fed to launch a third round of quantitative easing (QE3) after its meeting and the nation’s central banker did not disappoint.
It launched QE3 and did so with such scale that even Wall Street was shocked.
The Federal Reserve announced a plan to purchase $40 billion monthly of mortgage-backed bonds indefinitely, a move aimed at lowering U.S. mortgage rates in order to stimulate the housing market which can create more jobs in construction and other related industries. (more…)
Sep 13, 2012 | Federal Reserve
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Thursday. For the eighth consecutive meeting, the vote was nearly unanimous.
Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.
The Fed Funds Rate has been near zero percent since December 2008.
In its press release, the Federal Reserve noted that the U.S. economy has been expanding “at a moderate pace” in recent months, led by growth in household spending. However, “strains in global financial markets” remain a significant threat to growth in the near-term, a remark made in reference to the Eurozone and its sovereign debt and recession issues.
The Fed’s statement also included the following economic observations :
- Growth in employment has been slow with unemployment elevated
- Inflation has been subdued, despite rising gas and oil prices
- Business spending on equipment and structures has slowed
In addition, the Fed addressed the housing market, stating that there have been signs of improvement, “albeit from a depressed level”. (more…)
Sep 13, 2012 | Federal Reserve
The Federal Open Market Committee ends a 2-day meeting today, the group’s sixth of 8 scheduled meetings this year. As a Massachusetts home buyer or would-be refinancer, be ready for mortgage rates to change.
The Federal Open Market Committee is a 12-person sub-committee of the Federal Reserve. Led by Fed Chairman Ben Bernanke, it’s the group within the Fed tasked with voting on U.S. monetary policy.
The act for which the FOMC is most well-known is its management of the Fed Funds Rate. The Fed Funds Rate is the interest rate at which banks borrow money from each other overnight. It’s one of several interest rates under Federal Reserve management.
“Mortgage rates”, however, is not among them. (more…)
