Hot off the presses from Shannon Bagshaw at LoanSouth, here’s a macro-view at some housing market vitals. Some good information to help you gain a little “”trees from the forest”” perspective:
Home Prices Rise Nationwide for First Time:
The Case-Shiller 20 city and 10 city indexes increased year-over-year for the first time since December 2006 which is considered the beginning of the housing slump.
The index rose 1.4% for the 10 city index and 0.6% for 20 city index. It is first time in over three years that the indexes were above zero. A reading above zero shows price increases.
This housing indicator clearly shows that the housing market is making its way back. That means that this is the year to purchase before the market takes off.
Economy Grows at 3.2%:
The Gross Domestic Product (GDP) for this first quarter grew at a rate of 3.2%. The GDP is our nation’s report card and shows if we growing or shrinking. This is the third straight GDP report that is in positive territory.
The report showed that consumer spending accelerated at a 3.6% rate which was double the 1.6% pace in the 4th quarter of last year. Consumer spending makes up approximately 70% of U.S. economic activity, and it added 2.55 percentage points to GDP last quarter. That is the biggest percentage contribution since 2006.
Manufacturing also continued to show growth as businesses continue to rebuild low inventory levels. This generally leads to job growth which, is the precursor to increased housing demand.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +65 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans to their best levels in two weeks. MBS pricing increased (which causes mortgage rates to go down) due primarily to Greece. Yes, Greece. With concern about their looming default on their sovereign debt and the subsequent “”domino affect”” all across Europe, money flew into U.S. treasuries and MBS. This artificial (and temporary) demand helped to push mortgage rates down.