Last week’s economic reports included the National Association of Home Builders Wells Fargo Housing Market Index, Housing Starts for December and the FHFA Home Price Index report for November. The National Association of Realtors® also released its Existing Home Sales report for December.
Freddie Mac and the Department of Commerce released their weekly reports on mortgage rates and new jobless claims.
Builder Confidence Close to Record High, Housing Starts Rise
The National Association of Home Builders (NAHB) reported that home builder confidence slipped by one point in January to an index reading of 57. This was not a significant decline as any reading over 50 indicates that a majority of builders are confident about current housing market conditions. January’s confidence reading remained close to a 2005 peak.
Housing Starts rose in December to 1.09 million starts as compared to expectations of 1.04 million starts and November’s reading of 1.04 million housing starts according to the Department of Commerce.
December’s annual reading reflected strong home builder confidence and was the highest for housing starts since 2007. Low mortgage rates and improving labor markets were seen as factors contributing to housing construction.
Existing Home Sales Fall, FHFA Home Price Index Gain
The National Association of Realtors reported that sales of previously owned homes fell to 4.05 million in December, which fell short of 5.08 million expected sales and 4.93 million sales of existing homes in November. Analysts were puzzled at the first drop in sales volume for existing homes since 2010.
Low mortgage rates, job growth and the possibility of less restrictive mortgage requirements were cited by analysts as factors that should have fueled sales of existing homes and should continue to boost home sales as more home buyers enter the market.
FHFA reported that prices of homes associated with Fannie Mae and Freddie Mac mortgages rose 5.30 percent year-over-year in November. This was an increase of 0.90 percent over October’s year-over-year reading of 4.40 percent.
Mortgage Rates, Jobless Claims Lower
Mortgage rates dropped across the board according to Freddie Mac. The average rate for a 30-year fixed rate mortgage fell by three basis points to 3.63 percent with discount points higher at 0.70 percent. The average rate for a 15-year mortgage was five basis points lower at 2.93 percent and discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage dropped by seven basis points to 2.83 percent with discount points unchanged at an average of 0.40 percent.
Weekly jobless claims fell from the prior week’s reading of 317,000 new claims filed to 307,000 new claims filed. Analysts had expected a reading of 298,000 new jobless claims filed. Analysts noted that this was the third consecutive reading above 300,000 new jobless claims since July, but the higher readings were attributed to layoffs of seasonal holiday workers.
Case-Shiller will release its composite home price index reports; new home sales, consumer confidence and consumer sentiment reports are scheduled along with a customary statement from the FOMC at the conclusion of its January meeting.
With the start of the New Year, it’s common to set new resolutions. While there are many goals that are worthwhile, paying off your mortgage as soon as possible can significantly improve your financial position and is a great goal to aim for. With that in mind, let’s take a quick look at a few helpful tips for paying your mortgage off sooner.
Refinance To A Shorter Mortgage Term
For example, switching from a 30-year mortgage to a 15-year will get your mortgage paid off in half the time it would have originally taken, and it will also lower the total amount owed. By switching to a 15-year mortgage plan, you can save well over a decade’s worth of interest payments.
Carefully Consider How Much Space You Need
Many people have more home than they can afford. By downsizing to a smaller, cheaper house, you should be able to pay more than your minimum payments each month. Other nice perks, such as saving money on heating and air conditioning, may also be able to help make the goal of paying off your mortgage seem more attainable.
Make Payments Every Other Week
Mortgage companies often give borrowers the option of choosing to make payments either every month or every other week. If you opt to pay every other week instead of every month and have a standard, 30-year mortgage, you’ll be able to pay off your debt about six years sooner than expected.
Find a regular expense in your budget that isn’t a necessity and start using that money towards your mortgage instead of what you would normally spend it on. For instance, bringing lunch to work each day instead of eating out could easily save a person at least $100 per month. That’s over $1,000 per year!
Set Extra Money Aside
To pay off your mortgage quickly without having to cut regular expenses, use overtime income, holiday pay and gift money for extra mortgage payments. This way, you can pay down your debt without having to lower your standard of living. Another option is getting a part-time job for a few hours each week and putting the extra income towards your house.
There are many things that you can do to pay off your mortgage quickly, but you don’t have to do them all. Whether you choose one tip from this list or all five, you should be able to start making progress on your loan.
Renovating your kitchen is an excellent way to improve its look, increase the value of your home and appeal to a more diverse range of home buyers if you decide to sell. However, a kitchen remodel can easily cost $10,000 to $20,000 or more, which is why you want to make choices that you can live with. Learning more about some of hottest trends for 2015 can help you decide what you want and don’t want in your kitchen.
Traditional Is Back
Trends come and go, but the classics remain constant. One of the hottest renovation trends for 2015 is a more traditional look. Homeowners today are no longer attached to trendy colors and modern designs; they want homes that have a more traditional look and will retain that traditional look for years to come.
Experts predict that 2015 will bring a return to darker wood colors for cabinets, tables, counters and even floors. There are also some reports that homeowners will use oil rubbed bronze and darker pulls and handles on cabinets and drawers as opposed to flashy and contemporary chrome accents. Other trends include rustic farmhouse tables, double porcelain sinks and natural stone counters.
It’s hard to go anywhere today without seeing or hearing about green decorating trends, and those trends carry over into kitchens. Homeowners want products made from recycled materials and the chance to “go green” at home. Adding a recycling center is just one of the hottest trends for the kitchen.
Designers also found that homeowners want counters and floors made from recycled or sustainable materials. Bamboo is a sustainable construction material that works well in flooring applications. Homeowners can also find counters made from old tires, soda bottles and other recycled goods.
Homeowners Want More Space
Ask anyone want they need in their homes, and the odds are good that many will say they need more space. Recessed lighting is one trendy accent that adds more space and reduces the number of fixtures and cords hanging down from the ceiling. Other ways to add more space include adding an island with storage to the center of the room and cutting down on the number of cabinets lining the walls.
There are a number of trendy ways that you can renovate and change your kitchen. Going green, adding more space and bringing in traditional elements are just a few of those ways. Talk with a real estate agent about other changes you can make that will add value to your kitchen.
The National Association of Homebuilders (NAHB) Wells Fargo Housing Market Index reported that homebuilder confidence in sales conditions for single-family homes declined one point to a reading of 57. The NAHB Housing Market Index measures home builder confidence based on builder opinions of current market conditions, future market conditions and buyer foot traffic in new homes.
Home Builder Confidence Stable for Seven Consecutive Months
January’s index reading of 57 was one point below December’s reading of 58. Any index reading above 50 indicates that more home builders are confident about housing market conditions than not. January’s reading was the seventh consecutive reading above 50. NAHB said that builder confidence in future market conditions slipped by four points to a reading of 60; builder confidence in current housing market conditions was unchanged at a reading of 62 and the reading for buyer foot traffic fell two points for a January reading of 44.
David Crowe, NAHB chief economist, cited improving labor markets, stronger economic conditions and higher consumer confidence as factors that contributed to January’s reading. In addition, analysts said that certain economic trends including higher rents and low mortgage rates may compel more renters to buy homes. Although pent-up demand contributed to buyer interest in recent months, restrictive mortgage credit policies are seen as a deterrent to higher sales volume. Builder confidence in home sales conditions would likely improve if the government can ease lender concerns about providing mortgages to buyers who don’t have strong credit scores.
Housing Market Index Indicates Room for Growth
In spite of strong builder confidence, there’s plenty of room for improvement in markets for new single-family homes. As of November, the sales pace for new homes was approximately 41 percent below the average pace for the last 20 years; housing starts for the same period were approximately 24 percent below the average for the prior 20 years. The Department of Commerce reported that housing starts were 24 percent below the 20 year average. This suggests that while borrowers are confident in housing market conditions overall, they may be taking a conservative approach on building new homes until more buyers enter the market.
This week’s upcoming housing-related reports will help determine the overall climate for housing market growth. Existing home sales and housing starts for December will be released along with FHFA’s home price report for November.
Last week’s scheduled economic news was mixed. Job openings increased and jobless claims increased, and consumer sentiment rose. Mortgage rates fell across the board. Labor market conditions improved and consumer prices fell in large part due to decreasing fuel prices. The details:
Labor Market Conditions Index Suggests Stronger Economy, Jobless Claims Jump
Positive labor market ratings continued to show evidence of strengthening economic conditions. The Federal Reserve’s Labor Market Conditions Index rose from November’s revised reading of 5.50 to December’s reading of 6.10. This index measures 19 economic indicators and rose well above its median reading of 1.90. November’s reading was the highest since May.
The Fed does not comment on month-to-month readings for this index. Job openings increased from November’s reading of 4.80 million to December’s reading of 5.00 million in according to the federal government.
Weekly Jobless Claims jumped to 316,000 as compared to the expected reading of 295,000 new claims and the prior week’s reading of 297,000 new jobless claims. Analysts said that some volatility in new unemployment claims are expected in the aftermath of the holiday season and noted that the latest reading was the highest since September.
Mortgage Rates, Retail Sales Fall
Freddie Mac reported lower average rates across the board. The average rate for a 30-year fixed rate mortgage fell by seven basis points to 3.66 percent; the average rate for a 15-year fixed rate mortgage also fell seven basis points to 2.98 percent. The average rate for 5/1 adjustable rate mortgages dropped by eight basis points from 2.98 to 2.08 percent.
Discount points for a 30-year fixed rate mortgage were unchanged at 0.60 percent, while average discount points for a 16-year mortgage dropped to 0.50 percent from the prior week’s reading of 0.60 percent. Discount points for 5/1 adjustable rate mortgages averaged 0.40 percent as compared to the prior week’s average of 0.50 percent. Lower mortgage rates help increase affordability and support home purchases by first-time and moderate income homebuyers.
Retail Sales for December dropped by -0.90 percent against expectations of -0.20 percent and November’s reading of +0.40 percent. December’s reading for retail sales except autos was lower by-0.10 percent as expected against November’s reading of +0.40 percent.
Last week ended on a positive note with the January reading for the Consumer Sentiment Index beating the expected reading of 95.0 with a reading of 98.20. December’s reading was 93.60.
This week’s economic reports include the National Association of Home Builders (NAHB) Housing Market Index, Housing Starts, The National Association of Realtors® Existing Home Sales report, FHFA Home Prices and Leading Economic Indicators. Freddie Mac’s mortgage rates reports and weekly jobless claims will be released as usual.