In a positive sign for the real estate market, housing starts picked up in March. Although not as much as expected, the increase was welcome news for a market that has not seen growth in recent months as so many experts has predicted would occur.
The best part of the report is that the strength in the data came from the single-family component. Overall starts rose 2.8 percent after a 1.9 percent increase in February. Although housing starts are down 5.9 percent from the same time last year, the gap seems to be closing. Single-family starts jumped 6.0 percent, following a 2.9 percent rise the month before.
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A larger than anticipated decline in mortgage rates over the last few weeks has rekindled some of the fire for homeowners to refinance their existing loans. This week the FHFA House Price Index along with the existing, and new home sales reports will be released. Early speculation on the reports is that they will continue to show a modest improvement in the housing market. (Stay tuned for Friday’s report for all the details)
Additional positive news for the housing market, surging home prices have helped nearly two million homeowners get back above water on their mortgages over the past year. During the first quarter of 2014, an estimated 9.1 million, or 17%, of homeowners were seriously underwater on their home, Seriously underwater is defined as their mortgage debts exceeds the value of their home by 25% or more according to RealtyTrac. This number is down from 10.9 million which represented 26%, of all properties a year earlier.
It seems that spring is here and the economy is beginning to feel the bounce of consumers coming out from the winter doldrums, at least when it comes to retail sales. Sales grew 1.1 percent in March after rebounding 0.7 percent in February. Although much of the latest increase came from motor vehicle sales, which rose 3.1 percent, following a 2.5 percent rebound in February, the increase is a welcome sign. Even when you take out motor vehicle sales from the report, sales still increased a strong 0.7 percent, following a gain of 0.3 percent in February.
Investors welcomed comments from Fed Chair Janet Yellen in that the Fed plans on keeping rates at historic lows for an extended period of time. The Fed reiterated that they plan to continue on the path of tapering the government bond buying stimulus program as planned. Where it was expected that the government tapering would have a dramatic impact on causing mortgage rates to increase, thus far there has been minimal impact on rates. Although mortgage rates are higher than the record lows we have seen in years past, mortgage rates are still very low and have had minimal impact on home affordability.
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This week the potential market reports are:
- Tuesday April 22nd – FHFA House Price Index and Existing Home Sales
- Wednesday April 23rd – MBA Applications and New Home Sales
- Thursday April 24th – First Time Jobless Claims and Durable Goods Orders
- Friday April 25th – Consumer Sentiment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (661)505-4300.
Source: Santa Clarita News