Last week’s economic highlights included the National Association of Home Builders (NAHB) Housing Market Index for October. The Commerce Department also released Housing Starts for September. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage dropped below four percent. The Fed released its Beige Book report, and Weekly jobless claims came in lower than expected. Here are the details:
Homebuilder Confidence Slips in Spite of Lower Mortgage Rates
U.S. Homebuilder confidence in housing market conditions slipped by 5 points to October’s reading of 54 as compared to September’s reading; this was also lower than the expected reading of 59. Builders are concerned over strict mortgage credit rules, but the NAHB’s chief economist noted that pent-up demand, lower mortgage rates and improved labor markets are expected to drive builder confidence in the near term. Readings of 50 and above indicate that more builders are confident about market conditions than not.
Freddie Mac reported lower average mortgage rates across the board with the rate for a 30-year fixed rate mortgage at 3.97 percent, a drop of 15 basis points from the prior reading. 15-year fixed rate mortgages had an average rate of 3.18 percent from the prior week’s reading of 3.30 percent. The average rate for a 5/1 adjustable rate mortgage fell by 13 basis points to 2.92 percent. Average discount points remained at 0.50 for all mortgage types.
If 30-year fixed rate mortgages can stay below the four percent mark, this could mean additional incentive for fence-sitters to become active home buyers.
Surprise: New Jobless Claims Hit 14-Year Low
Concerns over job markets and employment stability have consistently been of concern to home buyers in the aftermath of the recession. Last week’s jobless claims report brought encouraging news as it came in at 264,000 new jobless claims filed against predictions of 289,000 new claims and the prior week’s reading of 287,000 new jobless claims filed. This was the lowest number of new jobless claims filed in more than 14 years. Analysts said that lower numbers of weekly jobless claims indicate fewer layoffs, which should help boost prospective home buyers’ confidence in job stability.
Fed: Economy Growing at “Modest to Moderate Pace”
The Federal Reserve released its Beige Book report on Wednesday. This report contains anecdotes from business sources within the 12 Federal Reserve districts. The report said that the economy continues to grow at a modest to moderate pace and noted that potential concerns over the stronger U.S. dollar causing increases in export costs did not concern the Fed’s business sources.
Housing Starts, Consumer Confidence Up
September’s housing starts were above both expectations and August’s reading. 1.02 million starts were reported with the majority being multi-family homes. The expected reading was 1.015 million housing starts; this was based on August’s reading of 956,000 starts. This news is consistent with the drop in builder confidence for sales of new single-family homes.
The University of Michigan/Thompson-Reuters Consumer Sentiment Index for October rose to 86.4 against an expected reading of 83.5 and September’s reading of 84.6. This was the highest consumer sentiment reading in seven years. Analysts rained on the consumer sentiment parade by noting that recent jitters over Wall Street and concerns about Ebola outbreaks could cause the Consumer Sentiment Index to lose ground.
Next week’s scheduled economic reports include the National Association of REALTORS® Existing Home Sales report, FHFA’s Home Price Index and New Home Sales. Leading Economic Indicators will also be released.
The National Association of Home Builders (NAHB) reported that home builder sentiment lost its momentum in October and posted a seasonally adjusted reading of 54 in its Home Builder Market Index.
This reading was five points lower than expected and also five points lower than September’s reading. October’s reading was the first time in five months that builder confidence has fallen.
To put October’s reading in perspective, things aren’t all that bad. A reading over 50 indicates more builders are confident about housing market conditions than not. Also, October’s lower reading of 54 after the HMI reading reached a nine-year high in September.
Low Mortgage Rates, Pent-up Demand Expected to Drive Housing Markets
David Crowe, Chief Economist for NAHB said that low mortgage rates, improved labor markets and “significant” pent-up demand for homes all point to continued growth for housing markets.
NAHB reported that builders’ views on current market conditions dropped from September’s reading of 63 to 57 in October. The confidence rating for upcoming sales fell from 67 to 64. The gauge of home buyer traffic for new homes fell by six points to a reading of 41.
Analysts said that although stronger jobs markets can help would-be buyers get into the market, concerns over ultra-strict mortgage standards are dampening potential home sales.
Multi-family Housing Starts Outstrips Single Family Home Construction
Starts for all types of housing gained 8.60 percent in the first eight months of 2014, but single family housing construction accounted for only 3.10 percent of housing starts between January and August. September’s housing starts are set for release today (Friday).
New Jobless Claims Fall to Lowest Since 2005
In related news, the Labor Department reported that weekly jobless claims were lower than expected and also lower than for the prior week. The reading for new jobless claims was 264,000 new claims; this was 23,000 fewer new claims than the prior week’s reading of 287,000 new jobless claims filed. A reading of 289,000 new jobless claims had been expected. This was the lowest reading for new jobless claims since April 2005.
Whether you’ve decided it’s time for an upgrade or you’re moving on to a new city, if you’re selling your home you may be wondering how you can boost its value before listing it up for sale.
In today’s blog post we’ll share four ways that you can spend a bit of time and money upgrading your home before it hits the local real estate market.
Spruce Up Your Landscaping
You’ll want your home to make a great first impression, and as such a great place to start is by sprucing up your lawn, gardens and other landscape features. Your grass should be a healthy green, free of weeds and freshly trimmed.
If you can, look to add seasonal flowers in your front gardens as this can add a bit of color to your home. Keep any shrubs or trees trimmed away from the home so that buyers can get a good look.
Apply A Fresh Coat Of Paint
Another excellent way to increase your home’s “curb appeal” is by applying a fresh coat of paint to the house, the trim around the windows and the front door.
Of course, painting a house is a big job so this might be one that is best left to a team of professionals. For added effect, replace the fixtures on the front door and pick up new house numbers.
Upgrade Your Kitchen Appliances
Many buyers will focus intently on your kitchen and the condition of everything from your flooring to your cupboards. If you have an older refrigerator or stove you’ll want to replace those with newer stainless-steel models.
You’ll also want to ensure that you have quality countertops – if you’re replacing them, consider going with granite as it’s popular with younger buyers.
Install A New Set Of Bathroom Fixtures
Finally, if you haven’t renovated your bathroom recently you’ll want to invest in modernizing your faucets, mirrors and other fixtures. The decor of your bathroom should match that in the rest of your home, but also stand out in its own unique way.
If you have an old bathtub with stained porcelain, consider replacing it with a glass-enclosed waterfall shower. Don’t forget about your light fixtures; if you find the bathroom is a bit dark, replace these with something that adds brightness.
For more information about the home staging and selling process, contact a local real estate professional today. Real estate agents are your best source for expert advice when selling a home, so don’t hesitate to pick up the phone and call if you have questions.
Have you listed your home up for sale? If so, you’ve likely spent a lot of time crafting your listing and highlighting the many features of your home and property – but have you focused on the community around your home as well?
Let’s take a look at a few ways that you can promote the qualities of your local neighborhood as you’re working to convince a buyer that purchasing your home is a great decision.
Give Your Buyers The A Tour Of The Neighborhood
After your listing goes live it won’t be long before potential buyers and their agents are calling to set up viewings so they can see what your home looks like in person.
When a buyer tours your home, offer to spend a few minutes giving them a quick tour of the local community as well. Have a quick route determined beforehand which takes you past schools, medical facilities and other amenities that will help to reinforce that your area is a great one to live in.
Highlight Local Community Centers And Parks
Do you have a community center, fitness center or large park nearby? If so you’ll definitely want to ensure that your buyer knows about these – especially if you’re selling your home to a family with children.
Modern buyers are very appreciative of green space and local cultural amenities as in many areas they’re becoming a bit harder to find. Point out just how close those local running trails are or how the recreation center is just a short jog away.
Have A List Of Local Restaurants And Shops Handy
Whether you live in the suburbs or the downtown core of your city, it’s likely that you have a number of restaurants, cafés and shops nearby. Consider making a quick list of these, highlighting any favorites or popular spots that are well-known to everyone who lives in the area.
Virtually everyone likes to dine out on occasion, and many buyers will prefer to live in a community that has what they need within a short drive.
If you’re unsure of what community features you should be telling potential buyers about, be sure to ask your real estate agent as they have been through the selling process numerous times before and will know how to market the community around your home.
Economic news was lean last week as the first week of the month tends to be calm in the aftermath of the rush of end-of-month reporting.
Of note was CoreLogic’s report on housing markets, the release of the minutes from the most recent FOMC meeting and lower mortgage rates reported by Freddie Mac.
CoreLogic Reports Lowest Home Price Gains in Almost Two Years
August home prices hit their slowest growth rate in nearly two years according to CoreLogic data released last Tuesday. Annual home prices grew by 6.40 percent in August as compared to July’s reading of 6.80 percent. Year-over-year home price growth reached a rate of 11.40 percent in August.
Analysts have recently said that a slow-down in home price growth may increase slowing demand for homes as inventories of available homes have increased in recent months. Low inventories of available homes and high demand contributed to rapid growth of home prices in 2013.
The slower pace of home price gains is expected to continue next year; analysts predicted an annual growth rate of 5.20 percent in August 2015. Home prices remain about 12 percent below peak levels reached in 2006.
Federal Reserve Policy Makers Watch U.S. Dollar, European Markets
Minutes of the Federal Open Market Committee meeting held in September were released Wednesday. Of note were member concerns that changing the committee’s language for its oft-repeated assertion that target rates for federal funds would remain between 0.00 percent and 0.250 percent for a considerable time” after asset purchases under the QE program ended could be viewed as a fundamental policy change.
The FOMC also registered concerns over the impact of a stronger U.S. dollar on the economy and said that persistent weakening of the European economy could cause the dollar to strengthen too much. This would cause exports to decrease and could also slow inflation.
The Fed decided not change language in its forward guidance in order to avoid unintended reactions in the financial markets.
Mortgage Rates and Jobless Claims Fall
Freddie Mac’s Primary Mortgage Market Survey reported that average mortgage rates fell last week. The average rate for a 30-year fixed rate mortgage dropped by seven basis points to 4.12 percent with discount points higher at 0.50 percent.
The average rate for a 15-year fixed rate mortgage fell by six basis points to 3.30 percent with discount points unchanged at 0.50 percent. The average rate for a 5/1 adjustable-rate mortgage was lower by one basis point to 3.05 percent with discount points unchanged at 0.50 percent.
Weekly jobless claims were lower at 287,000 new claims filed against predictions of 294,000 new claims filed and the prior week’s reading of 288,000 new claims filed. This supports recent indications of stronger job markets; coupled with lower home prices, this could prompt more would-be homebuyers to buy homes.
Markets are closed for Monday’s Columbus Day holiday and no economic reports are scheduled for Tuesday. The Fed releases its Beige Book report Wednesday and the NAHB Home Builder’s Market index for October is due Thursday along with Freddie Mac’s PMMS report and weekly jobless claims.
Housing Starts and the Consumer Sentiment Index are scheduled for next Friday.