Daily Archives: December 23, 2016

U.S. new home sales jump to four-month high | Bedford Hills Real Estate

New U.S. single-family home sales rose more than forecast to a four-month high in November, likely as expectations of higher mortgage rates drew buyers into the market.

Other data on Friday showed consumer sentiment holding at near a 13-year high this month as Americans anticipated that a stronger economy would create more jobs.

The Commerce Department said new home sales increased 5.2 percent to a seasonally adjusted annual rate of 592,000 units last month.

Economists polled by Reuters had forecast single-family home sales, which account for about 9.5 percent of overall home sales, rising 2.1 percent to a 575,000-unit rate last month.

New home sales, which are derived from building permits, are volatile on a month-to-month basis and subject to large revisions. Sales were up 16.5 percent from a year ago.

Separately, the University of Michigan said its consumer sentiment index edged up to a reading of 98.2 from 98 earlier this month. That was the highest reading since January 2004.

The U.S. dollar .DXY pared gains and was trading lower against a basket of currencies after the data. Prices of U.S. Treasuries were trading higher while U.S. stock indexes were mixed.

Mortgage rates have been rising rapidly in the wake of Donald Trump’s victory in the Nov. 8 U.S. presidential election, which economists say could be pulling procrastinators into the market in fear of further increases in borrowing costs.

Trump’s plan to boost infrastructure spending and cut taxes is expected to stoke inflation. A report on Wednesday showed sales of previously owned homes rose to near a 10-year high in November.

INVENTORY RISE

Since the election, the interest rate on a fixed 30-year mortgage has increased more than 70 basis points to an average of 4.30 percent, the highest level since April 2014, according to data from mortgage finance firm Freddie Mac.

Mortgage rates are likely to rise further after the Federal Reserve raised its benchmark overnight interest rate last week by 25 basis points to a range of 0.50 percent to 0.75 percent. The U.S. central bank forecast three rate hikes for next year.

Higher borrowing costs come at a time when house price increases are outstripping wage gains, which could make purchases unaffordable for many first-time buyers.

 

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http://www.marketbeat.com/stories.aspx?story=http%3a%2f%2ffeeds.reuters.com%2f~r%2freuters%2fbusinessNews%2f~3%2f96u5-iu_kio%2fus-usa-economy-idUSKBN14C1NI

Builder Confidence Holds Firm in November | South Salem Real Estate

Builder Sentiment Up

Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth. Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. These factors will help keep housing on a steady, upward path in the months ahead.

 

hmi_nov

It is worth noting that most of the November HMI responses originated before the elections. Thus, builder confidence remained unchanged as the industry awaited the results.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.

 

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http://eyeonhousing.org/2016/11/builder-confidence-holds-firm-in-november/