Tips For Selling Your Home In The Fall

Posted in Real Estate by Michigan Real Estate Expert on August 23rd, 2018

Tips For Selling Your Home In The FallFootball season has kicked off, temperatures are cooling and pumpkin spice everything is for sale in the stores. Yes, fall is here. While most people associate the spring and summer months as the ideal times of year to buy or sell, fall is still a great time to put your home on the market.

Families tend to want to get into their new homes prior to the holiday season, so buyers are typically still very active during the fall months. That said, there are plenty of ways that you can ready your home for a fast fall sale.

Here’s a look at several tried and true tips to increase your curb appeal and move your property this autumn:

Keep The Yard Free Of Debris

Chances are your yard is full of leaves in the fall. But because temperatures are cooler and the days are shorter, fall is also a time of the year when your lawn looks its greenest and most lush. Make sure your leaves are cleaned up to show off the true potential of your yard (not to mention create the impression that your home is well maintained and cared for). Rake daily if you have to. If you don’t like raking, set the lawn mower to a low setting and bag the mulched leaves.

Autumn Curb Appeal

Buy some mums, a haystack and perhaps even some pumpkins or gourds to decorate your home with. These are perfect fall decor and can really help make your home stand out to potential buyers.

Hit The Lights

The days are shorter in the fall, which means that the natural light inside of your home may be waning during show times. That said, make sure all of the lights in the home are turned on prior to showings to create a well-lit, welcoming environment. 

Clean The Fireplace

With the nights getting cooler, fall is the perfect time of the year to start up the fireplace. If you have a gas fireplace, make sure that this is mentioned in the listing. Also make sure that the fireplace is clean and looks inviting in case the buyer wants to turn it on. If you have a natural fireplace, don’t fret. Even if you don’t use it, make sure that it’s cleaned out and looks ready to use.

Clean Your Gutters

In addition to making sure your yard is leaf-free, make sure that your gutters are also clean. You don’t want to give buyers the impression that your home isn’t well cared for. Plus, gutters overflowing with leaves can make the buyer think that the home requires excessive maintenance, which can be a turn off.

Your trusted real estate agent is ready to help you with these tips and more to make sure your home is a must-see listing this fall.

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Big Second Quarter GDP Numbers Impact Housing Market

Posted in Real Estate by Michigan Real Estate Expert on August 10th, 2018

Big Second Quarter GDP Numbers Impact Housing MarketPositive economic growth numbers are always cause for celebration and the second quarter GDP just went vertical. After nearly four years of sub-par growth, the real GDP hit 4.1 percent in the second quarter.

While that economic news has everyday Americans excited that we may be entering a new age of prosperity, drawing a concrete link to the real estate market may be difficult. But by looking long and hard at this uptick and its potential impact on housing, you may get a better idea about buying, selling or standing pat on residential and commercial property.

GDP Report Points To Demand

Among the positive measures from the recent economic report, consumption enjoyed a positive increase. The first quarter numbers were disappointingly sluggish in this area at a modest 0.5 percent. The second quarter took off like a rocket, by comparison, at 2.25 percent.  

Although that figure shows an upwardly mobile economy, some experts are calling it discouraging given the extraordinary consumer confidence that has risen to record highs of more than 101.0 since November 2017. This opinion begs the question: why are economy gurus disappointed?

The first part of that answer has to do with the implementation of the Tax Cuts and Jobs Act that is putting more money in American paychecks and rolled back income tax liability. Many economists forecast that this personal wealth growth would turn into solid consumption. While working families have enjoyed a breather in terms of scratching from paycheck to paycheck, home purchases have not gone through the roof.

Home availability remains relatively low. With Millennials scooping up many of the starter-home listings and Baby Boomers downsizing, a significant housing shortfall exists. If you have ever heard the term “seller’s market,” this is it.

Inventory Shortage Means Buy Quickly

There are always naysayers that point to lower than expected consumption and claim the economy is weak. The facts in the GDP report clearly dispute any such ideas.

Business investment spiked to a powerful 11.5 percent and then 7.3 percent in the first two quarters. Fixed business investment is on fire based on deregulation, soaring profits and confidence.

That’s why real estate resources are saying that the only thing holding the market back is inventory. Home sale data is not keeping pace with other sectors of the economy because there simply is not enough inventory to keep up with demand. For first-time buyers, this means get prequalified and act swiftly if you find a dream home. It won’t stay on the market long.

Prospective homebuyers may be relieved to know that positive construction indicators are trending. New homes are expected to improve the inventory shortage heading into 2019. Still, demand is likely to stay ahead of inventory.

Whether you are buying or selling, your trusted real estate professional can be one of your very best assets in this fast-paced market.

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3 Generations Top Housing Market Trends

Posted in Real Estate by Michigan Real Estate Expert on July 13th, 2018

3 Generations Top Housing Market TrendsHistorians like to say that those who do not learn the lessons of the past are doomed to repeat them. In the real estate industry, the chances of that happening are slim because agents and other professionals follow market trends closely.

That being said, a careful examination of 2017 market trends and other factors can help highlight where the housing market is headed. Consider these top trends when deciding about whether to buy or sell a property.

Millennials Scooping Up Homes

According to resources such as Zillow, the low inventory and emergence of Millennials in the home-buying market helped break records last year. Millennials comprised upwards of 34 percent of the market and about two-thirds of them were reportedly first-time home buyers.

Given the shortage of entry-level homes for this demographic, 2018 and 2019 should have them in the driver’s seat in terms of buying trends. Although home prices are expected to rise in the single digits during the foreseeable future, the second wave of Millennial home buyers are likely to take a big bite of listed properties. As this group moves into their mid-30s, expectations are that last year’s 34 percent turns into about 43 percent of homes purchased. Millennials appear to be setting the pace.

Gen Z Home Buyers Expect Smarter Homes

Consider those born between 1995 and 2001 are adults or on the cusp of becoming adults. The front end of Generation Z is graduating college and looking for starter homes. This group is bound and determined to be different and they were basically weaned on technology.

Tech-friendly kitchens, lights and home-integrated devices have been trending and this demographic is likely to make them a priority when buying a home. Homeowners who are considering updating to a so-called “Smart Home” could be rewarded with resale value once Gen Z enters their collective mid-30s. Smart homes are trending and could go vertical with Gen Z buyers.

Generation X Returns From Great Recession

The housing crisis of 2007-09 put upwards of 10 million Americans out of their homes. Forced into foreclosure and bankruptcy, the financial aftermath of that catastrophe is coming to an end.

Those that filed for bankruptcy during the crash are in position to put their rebuilt credit to work. According to reports, approximately 1.5 million people could become eligible to re-enter the housing market in 2019.

A large portion of these potential returning homebuyers fall into the Gen X age group. They are likely to be savvier than the first time out. Many of these 50-somethings are expected to be frugal and cautious value buyers that could target properties that are traditionally considered starter homes. Regardless of how the trend plays out, Gen X is coming to a housing market near you.

If these emerging trends indicate anything, it’s that the shortage of homes on the market will only get tighter. Several large emerging demographics and returning buyers are going to speed an already fast-selling market. The trending idea may be to buy a home in today’s market and save money.

Your trusted real estate agent is sure to keep up to date on all the trends. Be sure to contact them as soon as you are ready to list your current home or find the new home of your dreams.

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What’s Ahead For Mortgage Rates This Week – May 29th, 2018

Posted in Financial Reports by Michigan Real Estate Expert on May 29th, 2018

What’s Ahead For Mortgage Rates This Week – May 29th, 2018Last week’s economic reports included readings on sales of new and previously-owned homes along with weekly readings on mortgage rates and new jobless claims.

Home Sales Lower in April

Sales of new and previously-owned homes were lower in April. The Commerce Department reported sales of new homes at a seasonally-adjusted annual rate of 662,000 sales. New home sales were 1.50 percent lower than for March, but were11.60 percent higher year-over-year.

Analysts expected new home sales to rise to 682,000 sales based on the March reading of 672,000 new homes sold.  Sales of new homes are calculated based on a small sample of sales and are typically subject to adjustment. Year-to date sales were 8.40 percent higher year-over-year.

New home sales were downwardly revised for the past three months, which could indicate a slowing in the market. Higher interest rates and rising home prices may be taking a toll on buyer enthusiasm. Fewer buyers caused the inventory of homes for sale to increase to a 5.40month supply. Real estate pros typically consider a six-month supply of available homes a normal inventory of homes for sale.

Sales of previously owned homes were also lower in April; the National Association of Realtors® reported seasonally-adjusted annual sales of 5.46 million homes as compared to expected sales of 5.50 million and March sales pace of 5.60 million sales of previously-owned homes. While fewer sales can relieve demand and ease rising home prices, it appeared that potential buyers are waiting for more options.

Sales of pre-owned homes were 2.50 percent lower than for March and were 1.40 percent lower year-over-year; this was the second consecutive month for a lower year-over-year sales reading. The inventory crunch of pre-owned homes for sale has reduced the average sales period to decrease to 26 days.

Mortgage Rates Rise, Sideline Buyers and Sellers as New Jobless Claims Rise

Freddie Mac reported the highest average mortgage rates in seven years. 30-year mortgage rates averaged 4.66 percent; rates for a 15-year fixed rate mortgage averaged 4.15 percent and rates for 5/1 adjustable rate mortgages averaged 3.87 percent.

Discount points averaged 0.40 percent for fixed rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages. Mortgage rates have not risen so fast at the beginning of the year for 40 years. Analysts at Freddie Mac said that home sellers, as well as buyers, may be sidelined as inventories of homes shrink and mortgage rates rise. This could mean that sellers as well as buyers will wait until market conditions and mortgage rates ease.

First-time home buyers accounted for 33 percent of existing home sales; this was lower than the average of 40 percent. First-time buyers are important to real estate markets as their purchases of pre-owned homes enable homeowners to buy their next homes.

New jobless claims rose to 234,000 claims filed as compared to expectations of 219,000 new claims filed. 223,000 new claims were filed the prior week.

Whats Ahead

This week’s scheduled economic releases include readings from Case-Shiller on home prices, construction spending and pending home sales. ADP and Non-Farm payrolls and the national unemployment rate will also be released.

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Selling Your Home FHA? Learn These Tips To Ensure A Smooth Closing

Posted in Home Seller Tips by Michigan Real Estate Expert on April 4th, 2018

What Are The Requirements To Sell A Home Using FHABefore an owner can market a property to buyers that want to use a FHA loan, he will want to familiarize himself with the FHA’s standards. FHA won’t insure loans on just any property. While their standards aren’t as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.

Location and Lot

To qualify for FHA financing, the property has to be located on a road or easement that lets the owner freely enter and exit. The access also has to be paved with a surface that will work all year — a long dirt driveway that washes out in spring won’t qualify.

The FHA also wants the lot to be safe and free of pollution, radiation and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.

Property Exterior

The FHA’s requirements for making a loan start with the home’s roof. To pass muster, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process.

The property’s exterior has to be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of signs of exterior (and interior) damage. It also needs full exterior walls.

Property Interior

The property’s interior also needs to be inspected. FHA standards require that the home’s major systems be in good working order. Bedrooms should have egress routes for fire safety and the attic and basement should be free of signs of water or mold damage.

The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This doesn’t mean that a home has to be in perfect condition to be sold to an FHA mortgage-using borrower. It just needs to be a place that they can live.

Contact your trusted real estate professional to discuss these issues as well as any other questions regarding the sale of your home.

 

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What’s Ahead For Mortgage Rates This Week – February 5th, 2018

Posted in Market Outlook by Michigan Real Estate Expert on February 5th, 2018

Whats Ahead For Mortgage Rates This Week – January 29, 2018Last week’s economic releases included readings on pending home sales, Case-Shiller Home Price Indices and construction spending. The Federal Open Market Committee of the Federal Reserve released its monthly statement and weekly readings on mortgage rates and new jobless claims were released. Last week’s economic readings wrapped with a report on consumer confidence.

Case-Shiller: Home Prices Rise in November

Home prices rose an average of 0.70 percent monthly and 6.20 percent year-over-year according to Case-Shiller’s national home price index for November. Seattle, Washington posted the highest year-over-year home price growth rate at 12.70 percent. Las Vegas, Nevada posted year-over-year home price growth of 10.60 percent and San Francisco, California posted a home price growth rate of 9.10 percent. Home price gains were attributed to slim supplies of available homes in many areas.

While analysts suggested that strong housing markets (as reflected by high demand for homes) were good for the economy, issues of affordability, slim inventories of homes available and obstacles facing builders continue to impact housing markets.

Recent gains in home prices are fueled by artificially high demand caused by low inventories of homes for sale. Builders cited shortages of labor and buildable lots and said increasing materials costs were impacting rising prices for new homes. Construction spending rose 0.70 percent in December, which exceeded expectations of 0.50 percent and November’s month-to-month reading of 0.60 percent growth in construction spending.

Pending Home Sales Rise, Key Fed Interest Rate Unchanged

The National Association of Realtors® reported 0.50 percent growth in pending home sales in December and the highest month-to-month reading since March 2017. Year-over-year pending home sales gained only 0.50 percent. Pending sales reflect purchase contracts signed with sales not yet closed.

The Federal Reserve’s Federal Open Market Committee announced that it would not raise the target federal funds range of 1.25 to 1.50 percent, but indicated that inflation was nearing the Fed’s goal of 2 percent annually. Analysts said this could foreshadow a rate increase at the Committee’s next meeting in March.

Mortgage Rates, Weekly Jobless Claims

Mortgage rates rose last week according to Freddie Mac’s weekly Primary Mortgage Markets Survey. Rates for a 30-year fixed rate mortgage rose by seven basis points to an average of 4.22 percent; the average rate for a 15-year fixed rate mortgage rose six basis points to 3.68 percent. The average rate for a 5/1 adjustable rate mortgage ticked up one basis point to 3.53 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

First-time jobless claims dipped by 1000 claims to 230,000claims. Analysts expected 240,000 new claims. The University of Michigan reported a lower reading for consumer sentiment in January with an index reading of 95.7 as compared to an expected reading of 95.0 and December’s reading of 95.90. Consumer sentiment remains near pre-recession highs. Consumers cited tax breaks and large stock market gains as the basis for high confidence.

Whats Ahead

This week’s economic releases include readings on job openings and consumer credit along with weekly reports on mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – October 31, 2016

Posted in Mortgage Rates by Michigan Real Estate Expert on October 31st, 2016

Last week’s economic reports included S&P Case-Shiller Home Price Indexes, along with readings on new and pending home sales. Recurring weekly reports on mortgage rates and new jobless claims were also released.

Case-Shiller: Pacific Northwest Shows Fastest Home Price Growth

According to the Case-Shiller 20-City Home Price Index for August, home prices in Portland, Oregon and Seattle, Washington grew fastest year-over-year. Portland posted an August index reading of 11.70 percent and Portland followed closely with a reading of 11.40 percent. Denver, Colorado rounded out the top three cities with the fastest rates of home price growth with a year-over-year reading of 8.80 percent. The 20-City Home Price Index rose 0.30 percent year-over-year to 5.30 percent in August.

Low inventory of available homes poses challenges for housing markets, but Case-Shiller reported that the national home price index was 0.60 percent lower than its peak reading in 2006. The 20-City Home Price Index was 7.10 percent lower than the 2006 peak. This provides a positive context for healthy home price growth, but concerns linger about a repeat of the housing bubble that burst and caused home prices to crash.

David M. Blitzer, Chairman of the S&P Index Committee said that a new housing bubble is unlikely. Home buyers are not taking out huge mortgages as was common prior to the Great Recession; mortgage lenders have adopted stricter qualification standards to help ensure that borrowers can afford their mortgages.

New Home Sales Rise in September

Sales of new homes rose to a seasonally-adjusted annual rate of 593,000 sales in September according to the Commerce Department. Although lower than analysts’ expected reading of 600,000 sales, September’s reading surpassed August’s reading of 575,000 sales. August’s reading was downwardly revised from its original reading of 609,000, which suggests that new home prices are growing at a slower rate than expected.

High demand for homes boosted September’s reading for pending home sales, which represents homes under contract for sale that have not closed. Pending home sales increased in September with a reading of 1.50 percent growth as compared to August’s negative rate of -2.50 percent. Pending home sales provide indications of future completed sales and mortgage loan volume.

Mortgage Rates Rise, New Jobless Claims Fall

Mortgage rates were lower last week according to Freddie Mac’s Primary Mortgage Market Survey. The average rate for a 30-year fixed rate mortgage fell five basis points to 3.47 percent; rates for a 15-year fixed rate mortgage averaged 2.78 percent, which was one basis point lower than the prior week’s reading. The average rate for a 5/1 adjustable rate mortgage was also one basis point lower at 2.84 percent. Average discount points were 0.60, 0.50 and 0.40 percent respectively.

In spite of growth in home prices and volume of sales, consumer confidence slowed in October. October’s index reading of 98.60 as compared to an expected reading of 101.00 and September’s reading of 103.50. Analysts said that uncertainty over the upcoming presidential election contributed to October’s lower reading.

What’s Ahead

Next week’s scheduled economic reports include readings on inflation, construction spending core inflation, and labor reports. Non-farm payrolls, ADP employment, national unemployment rates will also be released. Freddie Mac’s mortgage rates report and new jobless claims will also be released.

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What’s Ahead For Mortgage Rates This Week – September 26, 2016

Posted in Mortgage Rates by Michigan Real Estate Expert on September 26th, 2016

Last week’s economic news was abundant with releases on home builder sentiment, housing starts, building permits, sales of previously owned homes. The Federal Open Market Committee of the Federal Reserve released its customary statement at the conclusion of its meeting; Fed Chair Janet Yellen also gave a press conference. Weekly readings on new jobless claims and mortgage rates were released as usual.

NAHB: Builder Sentiment Increases in September

Home builder confidence in housing market conditions increased in September according to the National Association of Home Builders Housing Market Index. Builder confidence rose five points to 65; analysts expected a reading of 60 based on August’s reading of 59. NAHB said that September’s reading was boosted by more “serious” buyers entering housing markets.

Components used to determine NAHB HMI readings were also higher. Builder confidence in current market conditions rose six points to 71; builder confidence in housing market conditions over the next six months rose by five points to 71. Builder confidence in buyer traffic in new housing developments rose four points to 48. Buyer traffic readings have not reached 50 since 2005; 50 is a neutral benchmark for NAHB HMI readings.

Home prices continue rising at a higher pace than wages; this is pressuring first-time and moderate income buyers out of the market. An ongoing shortage of available homes is pressing prices higher as demand increases. Analysts pay close attention to the NAHB HMI as building more new homes is a key factor in easing the shortage of homes for sale.

Housing Starts, Building Permits Lower

Commerce Department readings on housing starts and permits issued were lower for August Housing starts were lower in August at 1.142 million starts on a seasonally-adjusted annual pace. Analysts expected 1.182 million housing starts based on July’s reading of 1.212 million starts. Regional readings showed a dip in starts in the South. Severe flooding in Louisiana contributed to the lower reading for housing starts. August’s reading for housing starts was 5.80 percent lower than July’s reading and 0.90 percent lower than for July 2015.

Building permits issued were nearly flat in August; this was likely due to the prime building season winding down 1.139 million permits were issued as compared to 1.144 million permits issued in July. Single-family starts were six percent lower than for July and were 1.20 percent lower year-over-year.

Existing Home Sales Dip: High Demand, Low Supply Cited

Sales of pre-owned homes fell by 0.90 percent in August to a seasonally-adjusted annual rate of 5.33 million sales. Analysts expected a reading of 5.48 million sales; July’s reading for sales of pre-owned homes was 5.38 million sales.

Low inventory of available homes continues to impact housing markets as demand for homes increased and prices rose; the national average home price was $240,000 in August. Rising home prices continued to be driven by high demand and low supplies. These conditions also impacted first-time and moderate income home buyers who were pressured to keep up with rapidly rising home prices.

While mortgage rates remain relatively low, higher home prices and tight mortgage credit requirements remain obstacles for first-time buyers.

Mortgage Rates, Weekly Jobless Claims Lower

Freddie Mac reported lower mortgage rates last week. The average rate for a 30-year fixed rate mortgage fell by two basis points to 3.48 percent; the average rate for a15-year fixed rate mortgage fell on one basis point to 2.76 percent. The average rate for a 5/1 adjustable rate mortgage was lower by two basis points at 2.80 percent.

Analysts expected new jobless claims to remain flat at the prior week’s reading of 260,000 new claims, but 252,000 new claims were filed for the lowest reading since July. The four-week rolling average of new jobless claims fell by 22250 claims to 258,500. The four-week reading is considered a less volatile reading than week-to-week readings.

Federal Reserve: No Increase in Fed Rate

The Federal Open Market Committee said in its post-meeting statement that the target federal funds rate would not be raised. In a press conference given after the FOMC statement, Fed Chair Janet Yellen said that although the economy continued to improve, the Fed had concerns over the labor market and decided not to raise rates. Any increase in Federal Reserve rates triggers increases in consumer lending rates.

What’s Ahead

This week’s readings include Case-Shiller Home Price Indices, readings on new and pending home sales and weekly readings on mortgage rates and new jobless claims.

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What’s Ahead For Mortgage Rates This Week – September 12, 2016

Posted in Mortgage Rates by Michigan Real Estate Expert on September 12th, 2016

Few economic reports were released last week due to the Labor Day Holiday. The Federal Reserve released its Beige Book Report, which documents anecdotes shared with the Fed by its regional business contacts. A job openings report, weekly jobless claims and Freddie Mac’s survey of mortgage rates was also released.

Fed’s Beige Book: Approaching Election Dampens Business Growth

According to the Federal Reserve’s survey of business contacts within its 12 districts, November’s election is causing business owners to take a “wait and see” position regarding expansion plans. Commercial real estate contacts in several Fed districts cited modest projections for sales and construction for the second half of 2016. The Bank of Canada supported Fed contacts’ view of modest growth; it characterized U.S. business growth as “less certain.”

Analysts review the Beige Book report for indications of how the Fed may adjust its monetary policy including whether or not to raise the target federal funds rate. The Beige Book report did not reveal any compelling evidence for the Fed to raise rates before year-end, but Fed Chair Janet Yellen said in a recent statement that economic conditions were strengthening and favored a rate hike before year-end.

November’s election will likely delay any rate hike until December. Fed policymakers have repeatedly said that a combination of economic trends, current readings and news reports contribute to decisions relating to interest rates and other monetary policy issues.

Job Openings Rise, New Jobless Claims Drop

July job openings rose from June’s reading of 5.60 million openings to 5.90 million openings to hit an all-time high.  New jobless claims fell from 263,000 new claims to 259,000 new claims. The Labor Department also reported that hires increased from 5.17 million to 5.23 million in June. These readings are further indications of strengthening job markets and general economic growth.

Mortgage Rates Lower

Freddie Mac reported lower average mortgage rates last week; the average rate for a 30-year mortgage was two basis points lower at 3.44 percent; the average rate for a 15-year fixed rate mortgage was one basis point lower at 2.76 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points lower at 2.81 percent. Discount points averaged 0.60, 0.50 and 0.40 percent respectively.

What’s Ahead

Next week’s scheduled economic reports include readings on retail sales, national inflation and consumer sentiment.

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What’s Ahead For Mortgage Rates This Week – September 6, 2016

Posted in Mortgage Rates by Michigan Real Estate Expert on September 6th, 2016

Last week’s economic reports included readings on pending home sales, construction spending and consumer sentiment. Case-Shiller Home Price Indices for June were released, along with several labor-related reports including national unemployment, ADP Payrolls and Non-Farm Payrolls were also released along with weekly readings on new jobless claims and Freddie Mac’s survey of average mortgage rates.

Case-Shiller: Home Price Growth Holds Steady in June

According to the Case-Shiller 20-City Home Price Index for June, average national home prices held steady with a seasonally adjusted annual growth rate of 5.10 percent in June. The top three cities for home price growth were Portland, Oregon with a reading of 12.60 percent; Seattle, Washington followed with a reading of 11.00 percent. Denver, Colorado home prices grew by 9.20 percent year-over-year.

San Francisco, California, which had posted highest year-over-year price gains in recent months slipped with a reading of 6.40 percent year-over-year in June. This could signify a cooling of rapid price gains in high demand metro areas where home prices have become unaffordable for many buyers.

Construction Spending Flat in July, Pending Home Sales Increase

While builder sentiment has been strong, construction spending was flat in July as compared to an expected reading of 0.60 percent and June’s reading of an 0.90 percent increase in construction spending. The Commerce Department reported that pending home sales increased 1.30 percent in July, which exceeded expectations of 0.90 percent growth and June’s negative reading of -0.80 percent. July’s reading appeared to even out June’s unexpected slump in pending sales, which are considered an indicator for future closings and home loan volume.

Mortgage Rates, New Jobless Claims Rise

Mortgage rates rose for all three loan types reported by Freddie Mac. The rate for a 30-year mortgage rate rose three basis points to 3.46 percent; the average rate for a 15-year mortgage also rose three basis points to 2.77 percent. The average rate for a 5/1 adjustable rate mortgage jumped by eight basis points to 2.83 percent. Discount points averaged 0.50 percent, 0.50 percent and 0.40 percent respectively. Mortgage rates rose after the yield on 10-year Treasury Notes increased in response to a speech given by Fed Chair Janet Yellen that indicated that the target federal funds rate could be raised in December.

263,000 new jobless claims were filed as compared to expectations of 265,000 new claims and the prior week’s reading of 261,000 new claims. Job growth slowed in August; the Commerce Department reported a reading of 151,000 new jobs in its Non-Farm Payrolls report. Analysts expected 170,000 new jobs, which fell significantly short of July’s reading of 275,000 jobs created. Non-Farm Payrolls includes data for public and private sector jobs.

Labor Reports: Job Growth Slows, National Unemployment Holds Steady

ADP Payrolls also reported fewer private sector jobs created in August with a reading of 177,000 new jobs as compared to 194,000 private sector jobs created in July. Analysts characterized August jobs reports as “fickle” due to high numbers of summer vacations and company-wide summer holiday closures.

August’s reading for national unemployment held steady at 4.90 percent.

While slower growth in home prices and job creation could signal an economic slowdown, there was good news as consumer confidence rose to 101.7 in August; this reading surpassed the expected reading of 97.0 and July’s reading of 96.7.

What’s Ahead

This week’s scheduled economic news is lean due to the Labor Day holiday on Monday. In addition to weekly reports on new jobless claims and mortgage rates, reports on job openings and the Federal Reserve’s Beige Book report will be released.

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