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Mortgage Market Guide: New Home Sales Soar, Existing Home Sales Slip

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Home Price, Home Prices, Fed Holiday

Mortgage Market Guide: New Home Sales Soar, Existing Home Sales Slip

 

  In This Issue  
     
 
Last Week in Review: Home sales had their ups and downs in July, while GDP was in line with expectations.
 

Forecast for the Week: In a data-packed week, the Jobs Report will stand out.

View: Make meaningful business connections with networking alternatives.

 
     
  Last Week in Review  
     
 

“Sell me something.” Men Without Hats. New Home Sales soared in July to highs not seen in nine years. Existing Home Sales experienced the oppgosite, plagued by low inventory and higher prices.

New Home Sales Soar, Existing Home Sales Slip

New single-family home sales surged due to a strengthening job market and low home loan rates. New Home Sales rose 12.4 percent to an annual rate of 654,000, above the 580,000 expected, while June was revised lower to 582,000 from 592,000. The Northeast led the charge with a whopping 40 percent surge. Sales are up 31.3 percent from July 2015. The median price for a new home slipped 0.5 percent from a year ago to $294,600.

The sale of new homes is making up for an unexpected slip in July Existing Home Sales. The National Association of REALTORS® reported that sales of previously owned homes declined in July from June due to low inventories and higher prices. July Existing Home Sales fell 3.2 percent from June to an annual rate of 5.39 million units, below the 554,000 expected and down 1.6 percent from a year ago. Inventories are now at a 4.7 month supply, which is nearly 6 percent below last year. The median existing home price was up 5.3 percent from July 2015.

In terms of overall economic growth, real Gross Domestic Product (GDP) increased at an annual rate of 1.1 percent in the second quarter of 2016, in line with expectations, according to the “second” estimate released by the Bureau of Economic Analysis. GDP represents the total dollar value of all goods and services produced over a specific time period. In the first quarter, real GDP increased 0.8 percent. While consumer spending drove the increase, the buying power was offset by companies unloading excess inventory.

If you or anyone you know is in the market to invest in a new or existing home right now, home loan rates are quite attractive, hovering in historically low territory.

Please contact me with any questions you might have about home loans or rates.

 
     
  Forecast for the Week  
     
 
The August Jobs Report should attract the most attention at the end of this data-packed week.
  • Personal Income, Personal Spending and the inflation-reading Personal Consumption Expenditures will be released on Monday.
  • Housing numbers will be seen in Tuesday’s S&P/Case-Shiller Home Price Index and Wednesday’s Pending Home Sales.
  • Consumer Confidence will also be reported on Tuesday.
  • Look for manufacturing data from the Chicago PMI on Wednesday and the ISM Index on Thursday.
  • Also on Wednesday, the first of two key labor market reports will be delivered via the ADP National Employment Report.
  • As usual, weekly Initial Jobless Claims will be reported on Thursday.
  • The second reading from second quarter Productivity will also be released on Thursday.
  • Ending the week, the August Jobs Report comes out on Friday, which includes Non-farm Payrolls, Hourly Earnings and the Unemployment Rate.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
 

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds continued to trade in a tight pattern. Home loan rates remain in historically low territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Aug 26, 2016)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View…  
     
 
Hate Networking? Try These Instead.
 

Not everyone thrives on networking events. For some people, these events can feel downright awkward. Here are a few alternatives to traditional networking that can still help you make meaningful, business-building connections:

Meetup.com allows you to organize or join groups and clubs for just about any profession, hobby or social interest. Meetup helps organize event calendars, discussion threads and more. Some groups may charge a member or “chip in” fee. The best part is that if you can’t find a Meetup you’re interested in, it’s easy to gather some people and organize your own . Meetup organizer pricing starts at $9.99 per month for a group of 4 leaders and up to 50 members.

VolunteerMatch.org can help you find a cause or non-profit you care about, and introduce you to other likeminded people. Once you’ve established your reputation with an organization, set your sights on joining the board to network with other board members.

Workshops, civic clubs, alumni connections or other small groups are perfect environments for developing relationships. While a common topic may bring you together, new business connections will be only one of many organic results.

LinkedIn Groups provide a way to leverage social networking and build your reputation as a thought leader. Spend some time getting to know the best ways to contribute to conversations by joining existing discussions or posing timely, thought-provoking questions to your professional group, and then jump in.

Ask for introductions. Let friends, family and colleagues know you are looking to meet people in a specific profession or with a certain skill set. Then ask for introductions via email, social media or in person.

To make meaningful business connections, you don’t have to throw yourself into a mix-and-mingle event. Give the above options a try.

Please feel free to pass these helpful tips along to your team, clients and colleagues.

Sources: Entrepreneur, Idealist Careers

Economic Calendar for the Week of August 29 – September 02
New Home Sales Soar, Existing Home Sales Slip
 

 


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