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Real Estate & Market Report: May 24, 2013

Fred Arnold

By: Fred Arnold

The gas pedal on the stock market has been almost to the floor in recent weeks as the indices have been hitting record highs almost daily.  The foot came off the accelerator on Wednesday when the Federal Open Market Committee Minutes were released.  In the minutes it shows that more and more of the Fed board members are starting to consider when they government is going to step back from their bond buying program because the economy is improving at a faster pace than anticipated.


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The bond buying program is the reason that interest rates, especially mortgage rates, are so low and have remained there for so long.  Everyone knows that when the Fed stops buying bonds, or at least reduces the amount of bonds they are purchasing from $85 billion a month, mortgage rates will jump.Even though the Fed has not given a timetable to when they will start to taper down their bond purchases, that has not stopped bond investors from being spooked and they are dumping their bonds on the market, which causes bond yields to increase.  The bottom line is that mortgage rates in the last 2 weeks have jumped in the area of ½% because of concern about the Fed exiting their bond purchases. The rate increases are starting to be felt in mortgage activity on the purchase side but nowhere near as much as on refinances.  The one bright spot is that purchase loan activity is still 10% higher than a year ago. 

Existing home sales caught fire last month with a jump of 0.6%.  Single family home sales which is the most important component of the report jumped 1.2% in the month.  Supply of homes which has been very tight increased dramatically in April.  It appears that home owners that have been sitting on the fence waiting for the market to improve are now jumping into the market to sell.  Inventory increased from 4.7 months to 5.2 months which is one of the largest inventory increases we have seen in a single month.  Existing home sales are up 9.7% from the same time last year.

Even in the new home sales section of the market activity is rising.  There is a limited amount of inventory in this sector however as fast as the builders can construct homes, they are being sold.  New home sales rose 2.3% in April and there appears to be no sign of this letting up.  Pent up demand for housing still remains very strong.


Do you have a news tip? Call us at (661) 298-1220, or drop us a line at community@hometownstation.com.


Please remember that Memorial Day is a day of remembering the men and women who died while serving in the United States Armed Forces. It began after the Civil War, and has since been extended to honor all Americans who have died while in the military service. Please take a moment to think of them.

Economic reports for next week are: 

•           Tuesday May 28th – S&P Case-Shiller Home Price Index & Consumer Confidence

•           Wednesday May 29th - MBA Report

•           Thursday May 30th - First Time Jobless Claims ad GDP

•           Friday May 31st – 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.

Real Estate & Market Report: May 24, 2013


Article: Real Estate & Market Report: May 24, 2013
Source: Santa Clarita News
Author: Andrew Delgado