Tag: GDP

Positive Economic News Takes Rates Higher

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved up last week across most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. It was the second consecutive week rates increased and follows a general trend upward over the past month. Joel Kan, an MBA economist, told CNBC positive economic news has been pushing rates higher. “Economic news in recent weeks has been mostly positive, especially in terms of GDP growth and increasing wages,” Kan said. “This raises the likelihood of the Fed raising rates at its December meeting, but also indicates stronger domestic economic fundamentals, which pushes rates higher.” As usual, rising rates had a negative effect on refinance activity, which is more sensitive to rate fluctuations than home purchase activity. Refinance demand dipped 3 percent last week from the week before, while demand for loans to buy homes was actually up 1 percent and is now 11 percent higher than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.


Builders Confident In New Home Market

One way to determine the health of any particular housing market is to gauge how many new homes are being built in the area. That’s because new homes add inventory to the market, which plays an important role in moderating price increases and giving buyers more options when looking for a house to buy. For this reason, the National Association of Home Builders surveys builders each month to get a feel for how the new home market is doing. The survey scores builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In August, the survey found builder confidence up two points from the month before, reaching a score of 60. In particular, the index components measuring current sales conditions and future expectations both increased. Robert Dietz, NAHB’s chief economist, says the overall housing market should continue on an upward path through the end of the year. “Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” Dietz said. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.” More here.

New House 13

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