IN THIS ISSUE
Last Week in Review: February New Home Sales reached their best level in seven years, while U.S. economic growth for 2014 was disappointing.
Forecast for the Week: A packed economic calendar is ahead, culminating with Friday's Jobs Report for March.
LAST WEEK IN REVIEW
"You take the good, you take the bad." The Facts of Life. That television series theme song also applies to recent economic news, as housing is a bright spot while economic growth overall remains sluggish.
New Home Sales surged in February, rising 8 percent from January to an annual rate of 539,000 units, while January's sales were revised higher to 500,000. New Home Sales now stand at their best level since February 2008 and are up nearly 25 percent from the 432,000 recorded in February 2014. The report also showed that the median sales price for new homes was $275,500, up 2.6 percent from a year ago.
Existing Home Sales also rose by a modest 1.2 percent in February, to an annual rate of 4.88 million units, which was just below expectations. Low inventories were said to be a key factor in price growth, which rose at the fastest pace in a year.
However, growth for our economy overall is still sluggish. The final reading on fourth quarter 2014 Gross Domestic Product (GDP) was unchanged from the second reading, coming in at 2.2 percent. This was well below the 5 percent recorded in the third quarter of last year. For all of 2014, GDP was 2.42 percent, which is disappointing considering we are six years into our economic recovery. One positive item to note from the report: Consumer spending rose to 4.4 percent, which is the fastest rate since the first quarter of 2006.
The bottom line is that home loan rates remain attractive, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. Please feel free to contact me at firstname.lastname@example.org.
FORECAST FOR THE WEEK
Key reports on inflation, manufacturing and housing are ahead, along with the Jobs Report for March.
- The packed economic calendar will kick off on Monday with the Fed's favorite measure of inflation, Personal Consumption Expenditures, along with Personal Income and Personal Spending.
- In housing news, Pending Home Sales will be released Monday, followed by the S&P/Case-Shiller Home Price Index on Tuesday.
- Also on Tuesday, we'll get a read on Consumer Confidence.
- In the manufacturing sector, look for the Chicago PMI on Tuesday and the ISM Index on Wednesday.
- The first of two key labor market reports will be delivered on Wednesday with the ADP National Employment Report.
- As usual, Weekly Initial Jobless Claims will be released on Thursday.
- That brings us to Friday's Jobs Report for March, which will be dissected to the fullest extent by investors around the globe. The Jobs Report includes Non-farm Payrolls, the Unemployment Rate and Hourly Earnings.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.
By: Michael Borodinsky
Vice President/Regional Builder Branch Manager | Caliber Home Loans
Call Michael: 732-382-2654
Email Michael: Michael.Borodinsky@caliberhomeloans.com