Apr 24, 2012 | Mortgage Rates
The Federal Open Market Committee begins a 2-day meeting today in the nation’s capitol. It’s the group’s third of 8 scheduled meetings this year. Mortgage rates are expected to change upon the Fed’s adjournment.
Led by Chairman Ben Bernanke, the FOMC is a 12-person, Federal Reserve sub-committee. The FOMC is the group within the Fed which votes on U.S. monetary policy. “Making monetary policy” can mean a lot of things, and the action for which the FOMC is most well-known is its setting of the Fed Funds Funds.
The Fed Funds Rate is the overnight interest rate at which banks borrow money from each other. It’s one of many interest rates set by the Fed.
However, one series of interest rates not set by the Fed is mortgage rates. Instead, mortgage rates are based on the prices of mortgage-backed bonds and bonds are bought and sold on Wall Street. (more…)
Apr 20, 2012 | Housing Analysis
In March, for the second straight month, home resales slipped nationwide.
According to the National Association of REALTORS®, March 2012 Existing Home Sales fell to 4.48 million units on a seasonally-adjusted annualized basis — a 3 percent drop from February.
An “existing home” is a home that’s been previously occupied or owned.
The weaker-than-expected Existing Home Sales data is the third such housing report this month to suggest a lull in the spring housing market. Earlier this week, homebuilder confidence slipped for the first time in three months and March Single-Family Housing Starts fell, too.
The news wasn’t entirely bad for home resales, however. Although total home units sold decreased, so did the number of homes available for sale. There were just 2.37 million homes for sale nationwide in March, a 2 percent drop from the month prior.
At the current pace of sales, therefore, the entire nation’s home resale stock would “sell out” in 6.3 months. This is the second-fastest pace since the housing market’s April 2007 peak. (more…)
Apr 19, 2012 | Housing Analysis
According to foreclosure-tracking firm RealtyTrac, foreclosure filings fell to 199,000 in March 2012, a 17 percent decrease from March 2011. Last month marks the first time since July 2007 that foreclosure filings numbered less than 200,000 on a monthly basis — a span of nearly 5 years.
The generic term “foreclosure filing” is used to group all types of foreclosure activity into a single reading. It includes default notices, scheduled auctions, and bank repossessions. (more…)
Apr 18, 2012 | Housing Analysis
Tuesday, the government released its March 2012 New Residential Construction report.
The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.
Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.
Today’s newspapers offer up an excellent example.
According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.
For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle. (more…)
Apr 17, 2012 | Housing Analysis
For the first time in 3 months, homebuilder confidence has slipped.
As measured by the National Association of Homebuilders, the Housing Market Index dropped three notches in April to a reading of 25. The report measures homebuilder confidence in the newly-built, single-family housing market.
When the Housing Market Index reads 50 or better, it reflects favorable market conditions. Readings below 50 reflect unfavorable conditions.
According to the scale, not since April 2006 have housing market conditions have been deemed “favorable” but, recently, homebuilder confidence has picked up. Between September 2011 and March 2012, confidence doubled.
April’s reading remains that second-highest since 2007.
So what does “builder confidence” mean? The formula is a little bit tricky. (more…)
