Real Estate & Market Report: August 22, 2014
There seems to be little standing in the way of the stock market rising these days. Through the first 4 trading days of the week the market is up 275 points.
Despite all of the doom and gloom predictions that the markets were going to get hurt as the Fed continued to taper their stimulus program, none of that has come to be. Additionally, mortgage rates were expected to have risen by now.
What is interesting is that just this week mortgage rates hit the lowest point in a year according to Freddie Mac.
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There were 3 key housing reports released this week which all came in better than expected. On Monday the Housing Market Index, which comes from The National Association of Home Builders, came in with a solid 55, which was up 2 points from July. This is the highest reading since January.
There may be signs of a housing comeback in new construction Housing starts for July jumped 15.7 percent which is a huge turnaround from the prior months 4.0 percent decline. Strength in the increase was led by the multifamily component of the report. Multifamily surged 28.9 percent after a 3.1 percent decline in June. The single-family component also showed strength with a greater than expected 8.3 percent rise.
Related: Santa Clarita Real Estate News
The final positive housing report this week came on Thursday in the existing home sales report. The data showed a 2.4 rise for the month of July which topped most expert's predictions. June was also revised upward to 2.4 percent. The only slight down note is that the July report shows sales are down 4.3 percent from a year ago, however the gap between the current year and last year continues to close which can be seen as a positive trend.
Strength in the housing report indicates that single family home sales is where the increase was strongest. Additionally the supply of homes for sale for the latest month actually rose faster than sales. Housing supply increased by 3.5 percent in July to 2.37 million units. This report is very encouraging.
What is very interesting as of late is that the release of the Federal Open Market Committee minutes for the last few months has generated virtually no market reaction. Not too long ago the market would hinge on every word in these reports as investors were concerned about the Fed's tapering of the stimulus program which created fear that interest rates would rise.
Ironically virtually all of the predictions of higher interest rates and a worsening labor market as a result of the tapering have not come to fruition. In fact this week unemployment claims dropped below 300,000 for the first time since the recession.
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Next week will be busy with some important housing data:
Monday August 25th - New Home Sales
Tuesday August 26th - Durable Goods Orders, FHFA House Price Index and Case-Shiller
Wednesday August 27th - MBA Applications and FOMC Minutes
Thursday August 28th - First Time Jobless Claims, GDP and Pending Home Sales
Friday August 29th - Consumer Sentiment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (661) 505-4300.