Santa Clarita Real Estate & Market Report: March 20, 2015 – There is a new name for Fed Chair Janet Yellen, it is Goldie Lox. The stock market absolutely loved the message Yellen and the FOMC delivered on Wednesday.

The stock market has been planning for a Fed increase in rates possibly sooner than the anticipated June meeting.

On Wednesday the FOMC announced that they are not rushing to raise rates. Recent economic reports indicate that there may be some slowing happening in the economy.

A premature move by the Fed to raise rates could have a damaging impact on the economic recovery. For now it remains business as usual and investors are loving it.

The Fed is focused on four main areas in deciding when and how much to raise interest rates.

The four primary areas of attention are:

1) Jobs

2) Core Inflation

3) Wage Growth

4) Inflation Expectations.

Real Estate & Market Report

At the present time there is weakness in 3 out of 4 areas the Fed is focused on and future expectations are modest at this time.

The Fed announced that they believe the unemployment rate will continue to decline however they also revised downward expectations for economic growth and inflation. The decline in unemployment is more in part from less participation than it is from employers increasing staffing. Additionally wage growth appears all but stagnant, which is what continues to be the driver of virtually no inflation. Retailers and service providers have been finding that their attempts to increase prices are being met with an immediate decline in sales.

Although not necessarily the recent economic data the FOMC was focused on when it said that there is economic weakness beginning to appear, housing starts for the month of February fell sharply. The drop of 17 percent from January to February is the lowest level since January of 2014.

Weather across the Northeast appears to be the factor in driving down starts by a whopping 56.6 percent. The Midwest experienced a decline of 37.0 percent, the west down 18.2 percent, and the south dropped only 2.5 percent.

Stock Market

Mortgage applications declined for the week ending March 13

Next weeks potential market moving reports:

• Monday March 23 2013 Existing Home Sales
• Tuesday March 24 2013 Consumer Price Index, FHFA House Price Index & New Home Sales
• Wednesday March 25 – MBA Applications & Durable Goods Orders
• Thursday March 26 – First Time Jobless Claims
• Friday March 27 2013 Gross Domestic Production

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