Real Estate & Market Report: March 07, 2014
The weather...the weather...the weather! It is the weather that seems to being blamed from everything from low consumer confidence, to a decline in manufacturing, to poor retail sales. The relentless cold and snow in the Mid-Atlantic States all the way up to the Northeast through the month of February has many residents in those areas feeling the blues. If you watch any newscasts where they interview people from those areas, you hear words like "depressed", "sad" and "tired". The West Coast has their share of challenges with the extreme changes in weather from drought to flooding and mud slides depending on the area. The bottom line, is regardless of what part of the country you live in, the weather is playing havoc in the minds of so many people.
The reason I bring up the impact of the weather is that there is significant disparity between economic data that is monthly versus weekly. Monthly data being released this week reflects economic conditions that for the most part are one to two months old. Weekly data is much more reflective of current trends.
First time jobless claims eased as the weather changed. Initial claims declined a significant 26,000 for the week ending March 1st. Once again claims are in the low 300,000 area which can be a positive sign for future employment.
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The big number that everyone seems to care about and focus on is the labor department's employment data which was released on Friday at 8:30AM. To almost everyone's surprise the payroll numbers came in better than expected. Although the unemployment rate increase from 6.6% to 6.7%, the big number was new jobs added to nonfarm payrolls. The 175,000 jobs created in February was much better than January's 129,000. However, I must note that this is nowhere near where we need to be as this number counters the jobless claims numbers. Let hope for bigger numbers in job creation in the months to come.
On the housing front, recent declines in mortgage rates combined with a break in the weather in the last week and a half has transferred into borrower activity. The Mortgage Bankers Association of America reported that for the prior week purchase loan applications jumped 9.0 percent and refinance apps rose 10.0 percent.
The reports are a huge sigh of relief for many in the real estate and mortgage finance industries as the previous report showed declines of 4.0 percent and 11.0 percent. Many believe the significant upswing is a sign of things to break for the spring market.
Speaking with real estate professionals, many have noted a significant jump in buyer inquiries and traffic at open houses. On the selling side, many more home owners are contacting agents requesting Comparative Market Analysis Reports (CMAs) which lets sellers know approximately what their house is worth in today's market conditions. The increase in CMA requests is usually a precursor to sellers placing their home on the market for sale. The future looks bright for the housing market in the coming months as there appears to be significant pent up buyer demand.
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Next week potential market moving reports are on the lighter side once again.
- Wednesday March 12th - MBA Applications and 10 Year Note Auction
- Thursday March 13th - First Time Jobless Claims and Retail Sales
- Friday March 14th - Producer Price Index and Consumer Sentiment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (661)505-4300.