The stock market just keeps going higher. The Dow Jones Industrial Average is up almost another 200 points for the week. Since there has been little domestic or international news that would be considered disruptive to corporate earnings, investors keep buying stock. There is some talk that the market is getting too oversold and that a correction is coming. However, the majority of investors do not seem to being paying any mind to that possibility and trading volume and stock purchases remain high.
The existing home sales market is very hot right now. The resale market started 2017 with a very strong report of an increase of 3.3 percent from December. With a home sale rate of 5.690 million, this is the best showing for home sales since February of 2007.
Single family homes represented a strong portion of the growth. The surprise related to the increase in this sector is that housing inventory on a national level is at only 3.6 months. With such low inventory, it is unusual that the sales rate would be so high. It appears that more sellers are coming on the market, however buyer demand is staying right in line with the increase. Overall existing home sales are up 3.8 percent from the same time last year.
Home prices continue to rise, although not at a super-fast pace. The Federal Housing Finance Agency (FHFA) reported that home prices for December rose 0.4 percent. Overall prices are up 6.2 percent from the same time last year. As has been the case for many months, For the last quarter of 2016, Oregon is at the top with appreciation of 11.0 percent. Replacing Seattle, which has been a leading price growth area, is Colorado with an increase of 10.6 percent followed by Florida showing a rise of 10.4 percent. Specifically, St. Petersburg – Clearwater leaped 13.2 percent for the final quarter of last year. Wilmington Delaware was at the bottom with a price decline of 1.8 percent.
The seasonally adjusted index for mortgage applications, for both purchases and refinances, declined for the week ending February 17th. Purchase loan apps dropped 3.0 percent while refi’s inched lower by 1.0 percent according to the Mortgage Bankers Association of America. The Presidents Day holiday likely played a role in the decline as many parts of the country schools were closed for their Winter Break. Overall purchase applications are up 10.0 percent from the same time last year. Refinance apps are down to the lowest level since November 2008.
In the release of the most recent FOMC minutes, it was clear that the focus in the meeting was directly towards the next meeting scheduled for March. Raising rates is a very hot topic. Language in the minutes revealed that many board members believe that a rate hike would be appropriate “fairly soon”.
Next week’s potential market moving reports are:
· Monday February 27th – Pending home Sales and Durable Goods Orders
· Tuesday February 28th – S&P Corelogic Case-Shiller HPI and Consumer Confidence
· Wednesday March 1st - MBA Applications, ISM Manufacturing Index, and Construction Spending
· Thursday March 2nd - First Time Jobless Claims
· Friday March 3rd – ISM Non-Manufacturing Index
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (707) 455-7070.