INFO THAT HITS US WHERE WE LIVE... So far in the housing market, we seem to be doing pretty well with what we've been given.Pending Homes Sales closed out 2016 up 1.6% in December and comfortably ahead of a year ago.This National Association of Realtors (NAR) index of contracts signed on existing homes bodes well for the level of those closings a couple of months out. As reported last week, existing home sales finished the year at the highest point since 2006. Inventory is still a problem in many areas, but the NAR's chief economist expects housing starts will go up 7.9% this year, "especially if construction related regulations are relaxed." And it looks like they will be.
The latest Case-Shiller National Home Price Index was up 5.6% annually. The chair of the Index Committee said,"With the Index rising at about a 5.5% annual rate over the last two-and-a-half years, and having reached a new all-time high recently, one can argue that housing has recovered."The EVP of a real estate site added, "The good news is...2017 is getting off to a slightly better start than 2016, and existing homes sales are staying at a healthy level." The property economist at an economic consultancy observed, "After reaching a 50-year low in mid-2016, the homeownership rate edged up for the second consecutive time in the final quarter." Things are looking up.
BUSINESS TIP OF THE WEEK... Never stop learning. Working in a rapidly evolving service industry, what we're really out there selling is our knowledge. Our value to clients lies in the expertise we keep developing.
>> Review of Last Week
JOBS JOLT...Friday'sunexpectedly good jobs report, along with President Trump's first steps to roll back bank regulations, sent stocks upward. The Dow ended above 20,000 again (although down a smidge for the week), while the Nasdaq set a new record.The U.S. economy generated 227,000 new jobs in January, the biggest gain in four months, and well above the 195,000 average of the past year.The private sector actually added237,000jobs, but that overall number was reduced by the loss of 10,000 government payrolls. Manufacturing added jobs now two months in a row, and construction's 36,000 new payrolls should bode well for the spring home selling season.
As usual, all was not perfect, with wage growth up only a tick. But investors think that will hold off the next rate hike from the Fed, who met last week and kept all as is.The unemployment rate ticked up to 4.8%, though for good reason: a 584,000 boost in the labor force that put the labor participation rate above where it was a year ago.Fannie Mae's chief economist explained: "We view the strength in hiring as consistent with increased optimism from the private sector following the presidential election, with businesses saying they expected to expand and plan to hire more workers." Job growth drives housing, so let's hope we see many more parts of our country enjoying that growth.
The week ended with the Dow down 0.1%, to 20071; the S&P 500 UP 0.1%, to 2297; and the Nasdaq UP 0.1%, to 5667.
There was some sell offFridayin the bond market after a non-voting Fed member said March was in play for a rate hike. But the 30YR FNMA 4.0% bond we watch finished the week UP.09, at $104.89.For the week ending February 2, national average 30-year fixed mortgage rates remained flat inFreddie Mac's Primary Mortgage Market Survey.Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... The NAR reports the median down payment for first-time buyers stands at 6% for three years straight, and for repeat buyers, at 14% in three of the last four years.
>> This Week’s Forecast
CONSUMER SENTIMENT, TRADE DEFICIT BOTH SHRINK BUT STILL HIGH...As is often the case following a week packed with economic reports, this week is quiet. TheTrade Balancefor December should shrink a bit, but remain too high. The FebruaryUniversity of Michigan Consumer Sentiment - Preliminaryis also expected to shrink but stay high, which in that case is a good thing.
>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Feb 6–Feb 10
Author:Salvatore Defrisco Phone: 561-644-0052 Dated: February 6th 2017 Views: 140 About Salvatore: ...
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