IN THIS ISSUE
Last Week in Review: Home prices continue to rise at normal levels, while home loan rates continue to hover near record lows.
Forecast for the Week: The busy economic calendar and full slate of earnings reports could lead to volatility in the markets.
LAST WEEK IN REVIEW
April showers bring May flowers. This spring is certainly poised for a blooming housing season as home loan rates hover near record lows.
Home price gains are also holding steady. Research firm CoreLogic reported that home prices, including distressed sales, rose by 5.6 percent from February 2014 to February 2015. Prices were also up 1.1 percent from January to February. CoreLogic has forecasted that prices are expected to rise by 5.1 percent from February 2015 to February 2016, which would keep home price gains at normal levels.
CoreLogic's Chief Economist, Dr. Frank Nothaft, said, "Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months."
In other housing news, RealtyTrac reported that monthly house payments on a median-priced home are more affordable than the monthly fair market rent on a three-bedroom property in 76 percent of U.S. counties. With home loan rates just above all-time record lows, this is great incentive for people looking to purchase homes this spring.
And in news to watch as we move ahead this year, the minutes from the Fed's March meeting revealed that a hike in the Fed Funds Rate (the rate banks charge each other for lending money overnight) will be data dependent, with the timing still to be determined. When this rate hike does happen, volatility in the markets is a distinct possibility, but whether Mortgage Bonds and home loan rates will benefit remains to be seen.
The bottom line is that home loan rates remain at historic lows, and now is a perfect time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. I can be reached at email@example.com.
FORECAST FOR THE WEEK
The economic calendar is packed with key reports on inflation, housing, manufacturing and more.
- Economic data begins on Tuesday with Retail Sales, which will gauge the level of consumer spending in March.
- The Fed will be closely watching two inflation reports this week for any signs of pricing pressures: the wholesale-measuring Producer Price Index on Tuesday and the Consumer Price Index on Friday.
- In the manufacturing sector, look for the Empire State Index on Wednesday and the Philadelphia Fed Index on Thursday.
- Over in housing, the NAHB Housing Market Index will be released on Wednesday, while Thursday brings Housing Starts and Building Permits.
- Weekly Initial Jobless Claims will be released on Thursday, as usual.
- Ending the week, look for the Consumer Sentiment Index on Friday.
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
Follow Michael on Twitter: @mikeborodinksy