We have talked quite a bit recently about positive trends in home prices. This article will provide a summary of our reports from the past month, and more evidence for why we believe home prices are stabile and ready to begin moving upward.
The National Association of Realtors reported that April home prices rose 10.1 percent from last year, settling at a national average of $177,400. There has been debate about what this number suggests about the recovery of the housing market. Is this the rise in home prices we have all been waiting for?
Yesterday, we reported that the 10-year Treasury yield fell 12 basis points to a 60-year low of 1.63 percent. Today, the bond yield fell even further, to 1.55 percent, based on concerns about Spain’s economy (budget deficits and its struggling banking sector) and sluggish U.S. jobs and GDP reports.
Stocks dropped 1 percent today, as investors showed fears about the danger of Greek and Spanish debt contributing to a global economic slowdown. European leaders are openly discussing the risk of Greece leaving the Euro and the possible default of its debt.
Investors have continued to move into the U.S. bond market for safety, and today the 10-year Treasury yield fell below 1.671 percent – its previous record – and below 1.63 percent. The dollar also advanced against the Euro, hitting a two-year high ($1.2367).
The 10-year Treasury tracks mortgage interest rates, and with no immediate solution to European debt on the horizon, it is likely that rates will continue to hit record lows as investors remain in the bond market.
The outlook for the future of the U.S. economy is generally one of growth, according to strengthening economic indicators and a survey from the National Association of Business Economics. The housing market is showing strength and unemployment has slowly declined. Still, European economies are expected to contract this year, and the debt crisis has raised a great deal of concern in global markets. The U.S. economy is slowly improving, but the world is flat, and a crash in Europe would find its way over to impact the United States.
Concerns about Europe weighed heavily on the markets this week, and had everybody scrambling to figure out what a Greek default (and subsequent departure from the Euro) would mean for the global economy (for one example, see THIS article from CNBC). The Dow trended slightly up over the week but ended on a low note (down 74.92 to 12,454.83) going into the holiday weekend. Partially as a result of all this uncertainty, rates have remained unchanged and at record lows. The refinance window is open for thousands in savings. Give us a call for a free, quick and easy conversation about your finances – 805.543.LOAN.
Jobless claims have declined this past week, and are now trending back at March levels. Jobless claims for the May 19 week (370,000) are down 2,000 from the previous week. The four-week average (370,000) is also down for the third week in a row, a 15,000 improvement from late April.
New orders of durable goods were up month-over-month (0.2 percent) as well as year-over-year (6.9 percent). Excluding transportation, durable good dropped 0.6 percent month-over-month. Declines were seen in machinery, fabricated metals, computers, electronics and electrical. Improvements were seen in transportation and primary metals.
PASO ROBLES – It is official: Central Coast Lending is part of the Paso Robles Chamber of Commerce community. On Monday, May 21, Paso Robles-based loan officers Will Barnaby, Rene Martinez and Bruce Ulrich (soon to be) joined representatives from the Chamber, Central Coast Lending owner Daniel Podesto, and some big scissors at 1921 Spring Street to officially cut the ribbon. Barnaby got the privilege of using the big scissors.
We are excited to grow our Paso Robles network and become part of the community! For more on Paso Robles home loan programs and a real estate overview, please read HERE.
The knowledgeable appraiser/realtor Jacob Rodrigues joined us on KVEC 920 for our May 12 show to all of our appraisal questions – how homes are valued, problems in the industry and more. For more on home prices around the Central Coast, the future outlook for home prices, and the difficulties introduced to the lending/appraisal industries due to new HVCC lender-appraiser communication guidelines, please listen to the show.
New U.S single-family home sales rose (3.3 percent) from a seasonally adjusted 332,000-unit annual rate in March to 343,000, putting new home sales up 9.9 percent year-over-year. This is slightly higher than the 335,000-unit rate predicted by economists polled by Reuters. The median price of a new home is also up from March (0.7 percent), at $235,700. New home sales account for 7.6 percent of the overall housing market.
With mortgage rates at fresh record lows, mortgage applications rose 3.8 percent in the May 18 week. Fixed 30-year mortgage rates (3.93 percent) are down 3 basis points from the previous week. While refinancing applications have seen gains this week (5.6 percent), purchase applications continue to decline from the previous week, and are down 3.0 percent. The refinance share of total mortgage activity (76.6 percent) rose 1.7 percent from the previous week.