April 1, 2014 at 9:00 AM
"The world is but a perpetual see-saw." Michel de Montaigne. Last week, the news saw its fair share of ups and downs as economic reports were mixed. Read on for the details and what they mean for home loan rates.
The housing market continued to battle the harsh weather across much of the nation, as New Home Sales declined to a five-month low in February, coming in at 440,000. Pending Home Sales also declined in February while the Case Shiller 20-city Home Price Index rose 13.2 percent annually in January. This was down from the 13.4 percent in December and lower than expected. It will be important to see if the housing market improves as the weather warms around the country.
In labor market news, weekly Initial Jobless Claims fell to a four-month low of 311,000. In addition, the four-week moving average of claims, which irons out seasonal abnormalities, declined to 317,750–the lowest level since September. The drop in claims signals an improving labor market, but we'll have to see next week's Jobs Report for March for further confirmation.
Consumer Confidence rose to 82.3 in March, well above both expectations and the reading in February. This was the highest level since January 2008. Americans surveyed were more positive on future job prospects. It is important to note that March’s Consumer Sentiment Index, which provides a similar reading, fell to its lowest level since November.
What does this mean for home loan rates? Beginning in April, the Fed will purchase $30 billion in Treasuries and $25 billion in Mortgage Bonds (the type of Bonds on which home loan rates are based) to help stimulate the economy and housing market. This is down from the original $85 billion per month that the Fed had been purchasing. With the final reading for fourth quarter 2013 Gross Domestic Product coming in at 2.6 percent, well below the third quarter reading, the Fed will be closely watching upcoming reports as it evaluates the timing of further tapering. These decisions will continue to impact our economy and home loan rates as we move ahead this year.
The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.
This column takes a look at current mortgage rates, market trends and indexes. Jon Lamkin is Vice President of Mortgage Lending for Guaranteed Rate, 322 Route 46 W Suite 170 • Parsippany, NJ • 07054. He may be reached at 973.939.8661 / email@example.com / www.guaranteedrate.com/jonlamkin
The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.