By Fred Arnold
Wow a week without scandal, athlete doping, government fighting (beyond the normal nonsense), stock market craziness or anything else significant. I don’t know what to do with myself. I might actually have to write about economic reports this week because there was nothing else to distract me.
Existing home sales for the month of December were unexpectedly lower. Although lower, they were only down by 1%. The good news is that existing sales are up 12.8% from a year ago. In addition, home prices are rising which is a direct reflection of the fact that housing inventory is lower than anyone ever anticipated it would be at this point. According to the National Association of Realtors inventory of existing homes is down to 4.4 months where-as in November it was 4.8 months.
The big question being asked is what happened to the millions of homes in shadow inventory that the banks have been waiting for the right time to sell?
But plenty of folks shopping for houses using the internet. Earlier this month Mortgage News Daily reported, “Home-shopping consumers are not only exponentially increasing their reliance on the Internet but are also developing distinct patterns for using it in their housing searches. Google and the National Association of Realtors recently completed a joint study on how and how much prospective buyers use the various digital options, publishing the results in “The Digital House Hunt: Consumer and Market Trends in Real Estate.’ There is a generation that does its homework ahead of time – they shop in traditional ways (watching or reading ads, walk into stores to look at products, talks to friends, check styles and prices) but alternate these with digital sources. They watch “how-to” videos on You Tube, read product and service reviews, look up specific brands on search engines, and even research on the go with smart phones and tablets. Here is the report:
It appears that because of all of the mandates, laws and rules banks must follow in regard to foreclosure and loan modifications, the banks have been working closer than ever with homeowners to assist them by either modifying their loan or being more cooperative with short sales. If more homeowners receive assistance than there are less homes for the banks to sell and this is the main reason why inventories are low!
Mortgage interest rates have risen over the past few weeks. Home prices are 5.6% higher than they were a year ago and have reached the highest level since 2006. Home prices are expected to continue a strong rise throughout 2013 as long inventory continues to remain scarce.
The employment picture continues its pattern of improvement according to the Government. First time jobless claims were down to 330,000 which is the lowest they have been in 5 years.
A skeptical anthropologist was cataloging South American folk remedies with the assistance of a tribal elder who indicated that the leaves of a particular fern were a sure cure for any case of constipation.
When the anthropologist expressed his doubts, the elder looked him in the eye and said, “Let me tell you, with fronds like these, you don’t need enemas.”
Next week housing reports will dominate the economic calendar of reports.
- Monday January 28th – Durable Goods Orders
- Tuesday January 29th – S&P Case-Shiller House Price Index
- Wednesday January 30th – MBA Applications, ADP Employment Report, FOMC Announcement, GDP
- Thursday January 31st – First Time Jobless Claims
- Friday February 1st – National Employment and Construction Spending
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 call me at 661-505-4300 or by going to http://fredarnold.com.