In a week loaded with economic news and data investors seemed to be most interested in the words delivered from Janet Yellen, the Fed Chairman. On Wednesday, the Fed completed their monthly FOMC meeting and announced that they did not expect interest rates to rise until 2015.
The likelihood that rates will remain low for the remainder of the year fueled investor excitement and drove the DOW up almost 100 points. The NASDAQ finished at its highest level in 14 years.
The Fed reported that they would be continuing to taper their bond-buying program by 10 billion dollars down to 35 billion per month starting in July. The committee will reduce its holdings of mortgage-backed securities down to a pace of $15 billion per month versus $20 billion.
All of the Fed reductions were expected which is why the stock market did not react negatively to the news.
Don’t miss a thing. Get breaking Santa Clarita news alerts delivered right to your inbox.
On Tuesday, the report on housing starts was released. Unfortunately, the data indicated a possible slowdown in this area. Housing starts declined 6.5 percent after they had jumped 12.7 percent in April.
Additionally the single-family starts represented 5.9 percent of the drop. The good news in the report however is that overall housing starts still remain 9.4 percent higher than the same time last year. Building permits followed a similar pattern and declined 6.4 percent. Housing starts and permits have been jumping back and forth from positive to negative for quite some time so it is premature to allow any single monthly report to indicate a housing trend.
The housing market index, which reports on new home sales, has been showing signs of life coming out of the very challenging winter. Indications are that this sector of the housing market may be showing even greater growth momentum heading into the summer months. The index has been climbing in recent months and is currently at a level of 49, which is the highest level since January.
Finally, the outlook for the June employment report got a boost from the initial jobless claims report for the week of June 14. First time jobless claims have been hovering just above the 300k range in recent weeks. This week claims declined by 6,000 down to 312k. Additionally, improvement in continuing claims is showing signs of the labor market making a slow recovery.
Do you have a news tip? Call us at (661) 298-1220, or drop us a line at firstname.lastname@example.org.
Next week’s market moving reports are:
- Monday June 23rd – Existing Home Sales
- Tuesday June 24th – S&P Case-Shiller HPI, FHFA HPI, New Home Sales, Consumer Confidence
- Wednesday June 25th – MBA Applications, GDP and Durable Goods Orders
- Thursday June 26th – First Time Jobless Claims
- Friday June 27th – 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.
Source: Santa Clarita News