An improving US economic outlook was negative for mortgage rates this last week. Reduced concerns about Europe also caused a partial reversal in the flight to safety trade. As a result, mortgage rates ended the week higher.
Early in the month, the December Employment report showed a larger than expected increase of 200K jobs, and the Unemployment Rate continued to move lower. This week, Weekly Jobless Claims fell to the lowest level since April 2008. The labor market is one of the most important factors in the health of the economy, and many investors now view the outlook as brighter than it has been since the financial crisis began. If this is the case, it will be great news for the economy, and job gains will increase the willingness and the ability of people to purchase homes.
The Housing sector data released this last week was encouraging as well. December Existing Home Sales increased 5%, while the inventory of unsold homes declined 9%, to the lowest level since March 2005. December Housing Starts for single-family units increased 4%, and Building Permits for single-family units rose 2%. Finally, the January NAHB Home Builder confidence index rose for a fourth consecutive month to the highest level since 2007. Improving economic conditions, high affordability levels, and low mortgage rates provide solid reasons to be optimistic about the housing market.
The most highly anticipated economic news this week will be Wednesday’s Fed announcement. Investors will be looking for hints about whether the Fed will provide additional monetary stimulus. The most significant economic report will be Friday’s GDP data for the fourth quarter. GDP is the broadest measure of economic activity. Before that, Pending Home Sales will be released on Wednesday. Durable Orders and New Home Sales will come out on Thursday. Leading Indicators and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.
There is no need to panic, however; while it feels like these historically low mortgage interest rates will last forever, they will not. This is an important time to encourage your clients to “Get It Done”. Sell the home, buy the home, lock in the historically low mortgage interest rate.
Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.
Thank You For Your “Partnership”.