Apr 18, 2012 | Housing Analysis
Tuesday, the government released its March 2012 New Residential Construction report.
The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.
Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.
Today’s newspapers offer up an excellent example.
According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.
For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle. (more…)
Apr 17, 2012 | Housing Analysis
For the first time in 3 months, homebuilder confidence has slipped.
As measured by the National Association of Homebuilders, the Housing Market Index dropped three notches in April to a reading of 25. The report measures homebuilder confidence in the newly-built, single-family housing market.
When the Housing Market Index reads 50 or better, it reflects favorable market conditions. Readings below 50 reflect unfavorable conditions.
According to the scale, not since April 2006 have housing market conditions have been deemed “favorable” but, recently, homebuilder confidence has picked up. Between September 2011 and March 2012, confidence doubled.
April’s reading remains that second-highest since 2007.
So what does “builder confidence” mean? The formula is a little bit tricky. (more…)
Apr 13, 2012 | Mortgage Rates
After a brief surge north of 4 percent last month, mortgage rates have settled down, near their lowest levels of all-time.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.
0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.
Mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.
This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.
The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Massachusetts home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.
Of course, like all things in real estate, though, mortgage rates are local. (more…)
Apr 10, 2012 | The Economy
Americans continue to get back to work.
Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.
The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.
The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.
Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.
It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short. (more…)
Apr 5, 2012 | The Economy
If you’re out shopping for a home this week, or trying to lock a mortgage rate, with Friday comes home affordability risk. Consider locking your mortgage rate today.
The March Non-Farm Payrolls report is due for release Friday morning and mortgage rates are expected to move. Unfortunately for the home buyers and rate shoppers of Worcester County area , we can’t know in which direction that will be.
The prudent play may be to lock your mortgage rate today.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called “the jobs report”, the release is a bona fide market-mover, month after month.
Depending on how the March jobs data reads, FHA and conforming mortgage rates could rise — or fall — by a measurable amount post-release. This is because today’s mortgage market is closely tied to the economy, and the economy is closely tied to job growth.
The connection between jobs and mortgage rates is basic.
More workers leads to higher levels of consumer spending (more…)
