The economic recovery was once again reinforced last week with the majority of data continuing to point towards growth. Retail Sales rose a solid .7% showing that consumers are continuing to increase spending long after the holiday season has ended.
The Housing Market Index, which is a report, released by the National Association of Home Builders which measures builder optimism about the future of new construction, once again increased. This is the 4th straight month of improvement and the strongest report since the beginning of the recovery. What some experts find odd is that there is no data that necessarily supports the association’s optimism. However, if builders are optimistic about the future, who are we to argue?
Housing Starts also increased 1.5%. Month to month we have experienced oscillation of increases and declines however the trend is upward when placed on a graph. Housing Starts are up 9.9% from the same time last year.
Mortgage rates declined last week however this week they are trending back higher. These week to week movements have been within a margin of about ¼%. Purchase applications for last week declined by 8% and refinances remained virtually the same. The decline in purchases should be taken lightly as we cannot judge housing direction by a single weeks report.
First Time Jobless Claims continue to point to an improving employment picture as claims this past week declined another 15,000 down to 348,000. This is the lowest number of claims since the recession ended. Additionally, the 4 week moving average of claims dropped for the 10th time in 11 weeks.
The Federal Open Market Committee released the minutes from their last meeting on Tuesday. After reviewing the release, it is clear that the members are divided on the health of the economy. Some members believe the recovery is well underway and that although it may be happening slowly, the dynamics are in place for continued growth. Other members don’t necessarily share the same sentiment. These members believe the economy remains very fragile and that future growth is not a sure thing.
Prices on the wholesale level rose slightly more than expected. Although the increase was greater than anticipated, inflation continues to remain well under control and that wholesale level.
The stock market has been very quiet in both movement and trading volume. It appears that once again much concern amongst investors exists about the continued challenges in Europe. Greece has been in the news all week in that they have been struggling to put a plan in place acceptable for them to receive additional bailout funds. If Greece does not receive the funds needed, they may default on their debt which could have a ripple effect across Europe which would impact the world financial system.
If you are a home buyer thinking of purchasing, now is the time to act. Although mortgage rates continue to remain low, home prices are stabilizing and in some areas actually rising. Professional real estate agents have been relaying this message to their prospects and if their customers listen, activity in real estate will begin to pick up significantly in the coming months.
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 209-825-9383