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Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

  • Fed Chair Powell gave his semi-annual testimony before Congress. He said the Fed is "closely monitoring" the coronavirus for potential effects on the worldwide economy.
  • Investor fears of the global economic impact of the coronavirus have helped keep mortgage rates low. As fears ebb, it will likely pressure mortgage rates higher.
  • Despite stronger than expected jobs data late last week, mortgage rates continue to hold steady. The jobs data showed a strong labor market with increasing wages.

 

 

 

  • Near-record low mortgage rates are boosting application activity. The number of mortgages originated in Q4 of 2019 topped all quarters since the end of 2005.
  • The MBA reports mortgage delinquencies hit in all-time low at the end of last year, with less than 3.8% of outstanding loans 30 days or more past due.
  • Homes for sale inventory tumbled 14% in January, falling to the lowest level since 2012. Entry-level homes below $200,000 saw the steepest drop, down 19%.

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

  • Manufacturing activity rebounded in January, with the ISM index at its highest level since July. The improvement likely reflects ebbing trade tensions with China.
  • Fears of a slowdown in the global economy caused by the coronavirus are dissipating. Stocks have recovered, and rates are creeping up on new investor optimism.
  • New orders for U.S. made goods saw their highest increase in nearly 1-1/2 yrs in December. The data points to an improving economy, which could pressure rates higher.

 

 

  • Construction spending dipped in December. However, residential construction spending gained 1.4% as homebuilders grew more confident.
  • Realtor.com predicts millennials' share of mortgage originations will surpass 50% for the first time this spring, with Gen X at 32% and baby boomers at 17%.
  • Home design and decorating fads that are fading fast include macramé, all-gray interiors, shiplap, tribal prints, concrete countertops, and accent walls.

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

 

  • The Fed left rates unchanged this week, as was expected. Fed Chair Jerome Powell signaled the central bank would adjust policy as needed to support 2% inflation.
  • The deadly coronavirus that started in China continues to spread. Concerns over the economic costs of the outbreak have helped push mortgage rates to 4-month lows.
  • Consumer confidence jumped in January as the job market outlook improved. The data showed 49% of consumers think jobs are "plentiful," up from 46.5%.

 

 

  • New home sales fell unexpectedly in December, held down by a shortage of more affordable homes. However, lower mortgage rates supported the overall housing market.
  • Pending home sales dropped 4.9% in December over November, as the supply of homes hit a record low. Inventory is leanest on the low end, where demand is strongest.
  • Tight inventory continues to drive home prices higher. Nationally, prices increased 3.5% annually in Nov, up from 3.2% in Oct, according to the Case-Shiller index.

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

  • Stocks across the globe are taking a hit this week as investors react to mounting concerns about a deadly virus in China and its effect on travel and spending.
  • President Trump is threatening more tariffs on European auto imports if the bloc doesn't agree to a trade deal. Trump has delayed imposing these tariffs a number of times.
  • Jobless claims rose slightly last week to 211,000 but were still lower than expected. The labor market continues to tighten, even as job growth is slowing.

 

 

  • New home builders can't keep up with demand. Even with an above average pace of construction, it would take 4-5 years to get back to a balanced market.
  • Existing home inventory is just as bad, as supply in December hit the lowest level since tracking began in 1982. Current supply would sell out in just 3 months.
  • The huge imbalance between supply and demand contributed to a jump in prices. The median home price in December was up 7.8%, the biggest annual increase in almost 4 years.

 

 


Please enjoy this quick update on what happened this week in the housing and financial markets.

 

  • This week the U.S. and China signed the 'phase one' trade deal, an event that helped drive global stocks to record highs. Talks will now begin on a 'phase two' deal.

 

  • Consumer prices rose slightly in December, but underlying inflation pressures retreated. Weak inflation supports the Fed's desire to keep policy rates unchanged.

 

  • Producer prices edged up in December as a rise in the cost of goods was offset by weakness in services. This reading was another indication of tame inflation.

 

  • Homebuyers were active to begin the year. Mortgage application volume was up 30.2% last week. Purchase applications were up 16% for the week and 8% year-over-year.

 

  • The Purchase Index, which includes all mortgage applications for the purchase of a single-family home, is now at its highest level since October 2009.

 

  • The Veterans Administration has eliminated loan limits on VA loans, starting January 1, 2020. However, there is also an increase on many associated fees.

 

 

 


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