Monday, May 29, 2017

Slight Increase in April Housing Prices, But Overall Market Slow

It has been a while since you have heard me make a reference how the more we hear about something, the more “numb” we become to it. Despite the on-going investigation into President Trump and the election, despite the terror attack in Manchester, despite that there has been little economic news that traders can grab on to, the stock market this week closed higher each day through Thursday.

The market is up 200 points for the week and will likely hold on to most of the gains through Friday based on stock futures. It appears that unless there is a major national or international event that impacts business directly, investors just don’t seem to care and maintain their belief in sustained economic growth.

The new home sales report for the month of April confirmed once again that this data can be volatile. Sales plummeted 11.4 percent to an annualized rate of 569,900. This is in direct contrast to March and February’s combined upward revision of 40,000. The good news is that the 3-month sales average is relatively steady. The concern in the report is that even though builders have been cutting prices by as much as 3.0 percent, sales still slowed. Year-on-year the median home prices for new home sales is now down 3.8 percent.

The supply of homes increased by only 4,000 for April. At the current pace of purchasing the monthly supply has swelled from 4.9 months up to 5.7 months. All regions of the country seemed to suffer this month regarding new home sales.

Continuing the negative trend for April housing was the decline of 2.3 percent in existing home sales. The silver-lining in the report is that the annual sales rate of 5.570 million is still near the economic recover high. A strong positive in the report is that the median home price increased by 3.5 percent for the month. Prices compared to the same time last year are up 6.0 percent.

Piggy-backing on the existing home sale report is the Federal Housing Finance Agency House Price Index. The latest figures for March show a monthly increase of 0.6 percent. Even stronger within the report is that prices are 6.2 percent higher than the same time last year.

Not surprising is that the Pacific region is the leader of the nine measured areas with a price jump of 7.9 percent. The Mountain states rose 0.6 percent to second place overall for a 7.4 percent increase. The Middle Atlantic continues to demonstrate the greatest weakness in that it was lower by 0.6 percent for the month and down 3.8 percent from the same time last year.

Next week’s potential market moving reports:

· Monday May 29th – Memorial Day, All Markets Closed
· Tuesday May 30th – S&P Corelogic Case-Shiller HPI, Consumer Confidence
· Wednesday May 31st - MBA Mortgage Applications, Pending Home Sales
· Thursday June 1st – ADP Employment Report, Jobless Claims
· Friday June 2nd – National Employment Situation

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.

Friday, May 26, 2017

Bathroom Safety Tips & Tricks

As part of our Safe & Sound Home series, Emily Henderson traveled to one family's home for lessons in safety and style.

Tuesday, May 23, 2017

How to Make Small Talk - Adulting 101: Century 21

Every connection starts small.

Because owning a home is only the beginning. Century 21 presents everything you need to know to master Adulting

Saturday, May 20, 2017

Despite Stock Volatility, Housing and Job Markets Remain Strong

Stock market appears set to close down about 300 points for the week based upon current futures in the market. Wednesday the market tumbled 373 points on concerns over concerns that President Trump may have been obstructing justice with the firing of Director Comey.

As the investigation unfolds it is appearing more and more that President Trump may have attempted to influence the former FBI Director to stop his investigation of former national security adviser Michael Flynn. Some Democrats are already screaming for the President to be impeached. It may be a little early for that type of talk, however concerns continue to mount over the administrations involvement in the Russia hacking scandal.

New home sales continue to surprise the market as builders are reporting strong activity for the month of May. Builders appear even more optimistic about future sales. The housing market has risen 2 points up to 70, which is higher than analysts were expecting. Current sales are also higher by 2 points to a level of 76. Buyer traffic remains strong at 51 and this is the 5th time in the last 6 months that the reading is over 50, which is considered very healthy.

Housing starts continue to remain strong for the single-family sector. This area rose 0.4 percent for the month of April to a rate of 835,000. The downside of the report is that permits for single-family home construction fell 4.5 percent. There does not appear to be any factors such as weather that appear to be contributing to this decline so questions are starting to be asked as to if this is the beginning of a change in direction. It is too early to tell with just this report, but analysts will certainly be watching future releases of housing data very closely.

Despite the fact that mortgage rates remained flat, applications for both purchases and refinances declined from 8 year highs in the week ending May 12th. Purchase applications dropped a seasonally adjusted 3.0 percent while refinances declined 6.0 percent. The positive part of the report is that purchase applications remain 9.0 percent higher than the same time last year. Not surprising is that refinance applications are down 41.1 percent from their highs. This is the lowest level of refinance activity since September 2008.

The labor market continues to remain extremely tight. First time jobless claims came in at 232k. The demand for labor is very strong and show no sign of letting up. Qualified candidates are hard to attract and this will likely lead to wage growth in the coming months.

Next week’s potential market moving reports are:

· Tuesday May 23rd – New Home Sales
· Wednesday May 24th - MBA Applications, FHFA HPI, Existing Home Sales, FOMC Minutes
· Thursday May 25th - First Time Jobless Claims, Bloomberg Consumer Comfort Index
· Friday May 26h – Durable Goods Orders, GDP, Corporate Profits

As your trusted 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.

Wednesday, May 17, 2017

Unemployment Low, Consumer Confidence, Home Sales Rise

A week with few surprises on the economic front had some investors making the decision to cash out their profits from the recent stock market rally. With the Dow Jones Industrial Average poised to finish the week down around 200 points, it seems that the major driver of the decline was more profit taking than anything else.

The only data related on housing this week was the Mortgage Bankers Association report on mortgage loan applications. Purchase apps for the week ending May 5th increased 2.0 percent. This follows last week’s increase of 4.0 percent. Home purchase activity continues to remain extremely high in almost every major market in the country. The shortage of home inventory is what appears to be the only thing holding back the purchase numbers from soaring as demand for housing remains at a post-recession high. Applications for refinances also increased by 2.0 percent. Overall refi activity is approximately 40 percent behind the same time last year.

The report on Job Openings and Labor Turnover (JOLTS) shows there are plenty of help-wanted signs to be seen, however there appears to be a limited number of qualified applicants to fill these open positions. With unemployment at one of the lowest points in history, it is becoming harder and harder for employers to attract the right talent. More employees are changing companies than in recent past as confidence in the economy continues to slowly improve. However, with unemployment so low, the cost to employers to attract qualified talent is increasing.

First time jobless claims remain at historical lows with the latest report showing only 236,000 claims were filed last week. 300,000 is considered the benchmark number as to where concerns around the job market might appear. The low numbers of claims validates the JOLTS report as to why employers are struggling to find the right talent to fill their open positions.

While March was an unusually weak month for inflation, April appears to be showing the exact opposite. The Producer Price Index rose a higher than expected 0.5 percent. Analysts were expecting only a 0.3 percent increase in wholesale prices. When you exclude the volatile food and energy sectors, prices rose 0.4 percent which places wholesale inflation on an annual rate of just under 5.0 percent. The likelihood of this number remaining at this level is extremely low, however it is important to note that this is one of the highest readings on wholesale price increases since 2007. A factor in the price growth is related to the recent Fed increase in interest rates.

Finally, consumer confidence readings are beginning to move back from their highs. The consumer comfort index remains very strong at a reading of 49.7, however this is a decline of 1.2 points from the previous month. Confidence continues to point to strength in employment.

Next week’s potential market moving reports are:

· Monday May 15th – Housing Market Index
· Tuesday May 16th - Housing Starts, Industrial Production
· Wednesday May 17th - MBA Applications
· Thursday May 18th - First Time Jobless Claims, Leading Economic Indicators
· Friday May 19th – St. Louis Fed Reserve Bank President Speaks

As your trusted 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.

Sunday, May 14, 2017

Happy Mother's Day!

A Mother is she who can take the place of all others 
but whose place no one else can take

Monday, May 8, 2017

General Economy Neutral, But Home Sales Remain Hot

Another week, and once again uneventful events happening on Wall Street. The Dow Jones Industrial Average traded within 100 points plus or minus almost the entire week. The biggest news for the week was the ability for Congress to pass the spending bill and avoid a government shutdown. Other than this agreement, it is clearer with each passing day that Democrats and Republicans could not be further apart on everything else in running this country.

The awaited release of the FOMC Announcement from their meeting this week arrived with little more than a thud on Wednesday. The Fed continues to remain upbeat regarding growth in the economy, however they do acknowledge that some of the fundamentals in the economy are showing slight signs of weakness. There was nothing in the Fed’s report that gave investors reason to feel that they may be changing course on the anticipated rate increases likely to happen later in the year.

One of the areas that has showed signs of slowing is manufacturing. The latest index for the Institute For Supply Manufacturing (ISM Mfg Index) declined for the first time after 7 straight months of beating expectations. Not only did it fall short, it was hit much harder than anyone expected. However, although the index did not meet expectations for April, the report standing on its own is quite solid with a reading of 54.8. Any reading above 50 is considered very strong.

April’s ISM Non-Manufacturing Index showed significant acceleration. New orders outside of manufacturing jumped 4.3 points all the way up to 63.2. This is the highest level in almost 12 years. Not only does this report reflect strong orders currently, there is a significant growth in backorders which means that this sector should remain solid for the coming months.

With mortgage rates not moving much in either direction, applications for refinances declined by 5.0 percent for the week ending April 28th. The home purchase market continues to remain red hot as indicated by the MBA’s report of an increase last week of 4.0 percent in purchase loan applications.

Many areas of the country continue to report that bidding wars are taking place on many homes coming on the market for sale. This is leading to frustration by some prospective buyers in which they are making a decision to step out of the market for a while to let things settle down. The frustration of not being able to get an accepted offer on a property is taking its toll on some of them. The good news is that reports from real estate professionals indicate that in many areas more homes are starting to come on the market. It appears that homeowners are wanting to take advantage of the hot market. The demand is still much higher than inventory so don’t expect the bidding wars to end anytime soon.

Next week is going to be quiet as far as economic reports that may impact the market.

· Monday May 8th – Labor Market Index
· Tuesday May 9th – JOLTS Report
· Wednesday May 10th – MBA Mortgage Applications Data
· Thursday May 11th – First time Jobless Claims, Producer Price Index
· Friday May 12th – Retail Sales, Consumer Price 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.

Tuesday, May 2, 2017

Newly Released Housing Data is Strong Nationwide

Housing data dominated the market data being released. Tuesday launched the housing news with the Federal Housing Finance Agency report on home prices. For the month of February home prices increased 0.8 percent. This was double the amount the majority of analyst’s predicted. Adding to the positive news was January’s numbers were revised from being flat, to showing an increase of 0.2 percent. Overall, home prices are up 6.4 percent from the same time last year.

Following the FHFA report, S&P Corelogic Case-Shiller HPI showed an increase in home prices by 0.7 percent for the 20 major cities measured. This stronger than expected report reflects a 5.9 increase from last year, and the best spread in 2-1/2 years.

What is impressive about this latest report is that some of the weakest cities in the past have shown significant improvement. The Midwest, notably Ohio and Michigan, which have been struggling to move higher, showed price growth of 0.9 percent in Cleveland, and 0.8 percent in Detroit.

When it comes to year-on-year appreciation, nothing is beating the Pacific Northwest. For well over a year, Seattle and Portland have been leading the country in price appreciation. Seattle home prices are currently up by 12.1 percent from the same time last year. Portland Oregon is higher by 9.6 percent.

Overall home prices across the country are averaging a year-on-year increase of 5.9 percent. Although this number is respectable, it is hard for people to be super excited about it. The interesting dynamic about this increase is that it is occurring in a low interest rate environment. Typically, when rates are low, home appreciation can be stagnant.

Pending home sales were the only negative in this week’s housing data. This sector showed a decline of 0.8 percent. The only reason for the decline is the lack of available inventory. Demand remains strong.

Rounding out this week’s housing reports was the data on new home sales. From February’s sales of 592,000, March showed a nice increase up to 621,000. Permits for new construction are also higher. What is very encouraging in the latest report is that the increase in new home sales did not come at the expense of reduced prices.

Prices for new homes rose a very strong 7.5 percent. Sales are up a whopping 15.6 percent from a year ago. More homes came on the market, however with the increase in demand, overall supply declined down to 5.2 months from 5.4 months.

Next week’s potential market moving reports are:

· Monday May 1st – Construction Spending, PMI Manufacturing Index
· Tuesday May 2nd – FOMC Meeting Begins
· Wednesday May 3rd – FOMC Announcement, MBA Applications, ADP Employment Report
· Thursday May 4th – First time Jobless Claims, Factory Orders
· Friday May 5th – Employment Situation

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.