Jan 31, 2012 | Housing Analysis
New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in Worcester County area and nationwide, December’s New Home Sales report is yet one more signal that the housing market recovery may be underway.
According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.
A “new home” is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.
As compared to December 2010, last months’ sales volume fell seven percent. It’s a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report — the supply of homes for sale — we’re forced to reconsider.
At the current pace of sales, every new home for sale nationwide would be “sold” in a matter of 6.1 months.
Economists believe that a 6.0-month supply defines a market in balance — anything quicker is termed a “seller’s market”. Statistics like that are enough to create urgency among today’s Worcester County area home buyers.
Unfortunately, the Census (more…)
Jan 27, 2012 | Housing Analysis
After 3 consecutive months of growth, the housing market appears to have eased a bit in December.
According to the National Association of REALTORS®, December’s Pending Home Sales Index slipped 4 percent from the month prior. The index measures the number of homes under contract to sell nationwide, but not yet sold.
Despite falling below its benchmark “100 value”, December’s Pending Home Sales Index is the reading’s second-highest value since April 2010 — the last month of last year’s home buyer tax credit program.
In other words, the housing market continues to show signs of improvement, propelled by low home prices and the cheapest mortgage rates of all-time.
Freddie Mac’s mortgage rate survey put the 30-year fixed rate mortgage at an average of 3.96% in December — a 75-basis point improvement from December 2010. This helps to (more…)
Jan 25, 2012 | Federal Reserve
Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The Fed Funds Rate has been near zero percent since December 2008.
For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.
In its press release, the Federal Reserve noted that the the U.S. economy has “expanding moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.
The Federal Reserve expects moderate economic (more…)
Jan 25, 2012 | Federal Reserve
The Federal Open Market Committee adjourns from a scheduled 2-day meeting today, its first of 8 scheduled meetings this year.
The FOMC is a designated, rotating, 12-person committee within the Federal Reserve, led by Federal Reserve Chairman Ben Bernanke. Members of the FOMC sub-committee are the voting members of the Federal Reserve; the ones that ultimately determine U.S. monetary policy.
The most well-known Federal Reserve monetary policy tool is the central bank’s Fed Funds Rate. The Fed Funds Rate is the prescribed interest rate at which banks borrow money from each other for a period of one night.
The Fed Funds Rate can only be changed by FOMC vote.
For home buyers and would-be refinancing households in Leominster area, it’s important to recognize that the Fed Funds Rate is an interest rate separate and distinct from “mortgage rates”. Mortgage rates are not voted upon by the (more…)
Jan 24, 2012 | Housing Analysis
The housing market finished 2011 with strength, and is carrying measurable momentum into 2012.
According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December’s Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.
An “existing home” is a home that’s been previously occupied; that cannot be considered new construction.
After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.
At today’s sales pace, the complete, national home inventory would be exhausted in 6.2 months — the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance.
The December Existing Home Sales report contained (more…)
