Incline Village Real Estate Blog. National Economic Summary
Wednesday, November 30, 2011
by Tim Lampe, Lakeshore Realty
Posted by Tim Lampe, Written by Steve Peterson.
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Commentary ~
November 30, 2011 |
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The major indicators moved very little over the past week. The Freddie Mac Average 30-Year Fixed Rate, for example edged down two basis points to 3.98% as it continues to do a gentle soft-shoe at the 4% level. Two basis points are, at best, a non-event. And in late November–during the Holiday and tax sale season–they add up to nothing.
"Nothing" is an operative word here. The 10-year Treasury note currently stands at 2%, three basis points above where it stood last week. Nothing. The MBA Mortgage Applications Index is calm, though the number of purchase money loans being applied for should give us some hope.
Indeed, the only indicators that really catch our attention have good things to suggest about the real estate market. The number of new applications for unemployment insurance remain below 400,000 in the last week, suggesting that the employment figures–the very important indicator that will be released this Friday–may improve slightly over those of recent months. And improving jobs numbers almost inevitably lead to at least slightly better home sales figures.
The latest S&P Case-Shiller Index suggested that home prices, weighted down with foreclosures sales, decreased by 0.6% last month and 3.6% on the year–and, though this doesn't seem particularly good news, it's a healthy drop from the price declines in recent months, suggesting that we're nearing the end of home value losses.
Almost as important as the coming employment data, the amount of money being spent on construction will be reported later this week, and the Pending Home Sales Index, showing how many new purchase contracts were signed in the last month, should be very telling as well.
Increasingly, there is a sense that we need to be watching the new-home sector. Usually thought to trail existing homes into recovery, newly-constructed homes seem to be setting the pace for this real estate recovery. Having improved very, very slowly, sales are now firming a bit and, though the month-to-month median price declined very slightly, we just saw the year-over-year price turn positive in October. It's an important event, perhaps foretelling a resilient housing sector. New homes have the advantage of being able to attract buyers by incorporating new features that buyers want...like the latest energy efficiency hardware and "universal design" concepts that make homes more livable for those who are aging or in some way infirm.
Continue to watch the new home sector. It will probably have a great deal to teach us as it defines the new real estate market.
Average Interest Rate
30-Year Freddie Mac Fixed-Rate Mortgages
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