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Demand is high but inventory remains low in this week’s Markets in a Minute!

Demand is high but inventory remains low in this week’s Markets in a Minute!
July 27, 2018 Fred Kreger

 

 

For the Week Ending July 27, 2018

The Markets:

The stock market continues to maintain its upward momentum. It seems that concerns over tariffs are taking a back seat to the numerous positive earnings reports coming out this month. Additionally, President Trump appears to be working with Europe to head off a trade war, and there seems to be progress.

 

Existing Home Sales:

Existing home sales slid for the third-straight month to the lowest level in 5 months. However, the home sales challenges continue to be driven by limited inventory, not a lack of demand. Buyers seeking to purchase a home remains very high, even though bidding wars are occurring on most houses as soon as they hit the market.

 

The median price for existing homes has hit an all-time high at $276,900, which is 5.2% higher than a year ago. First -timers represented 31% of all transactions in the month of June, which has remained consistent since the start of the housing recovery. Total housing inventory increased in June by 4.3%, however it remains 40% below pre-housing crisis levels.

 

New Home Sales:

Sales in this sector of the market have also declined, but not for the same reasons as existing home sales. Many experts believe that this area of the market may be starting to become more “normalized”. What exactly that means I am not sure because we have not seen a normal balanced market in well over 15 years. We have gone from high demand, to a crash, back to high demand. “Normalized” is a word that has been rarely used to describe anything related to housing in a
very long time.

 

Weekly Jobless Claims:

The latest report on unemployment showed an uptick of 9,000 first time jobless claims. This was not unexpected after last week’s claims hit a 48-year low. There were no special factors attributing to the increase other than in the summer months, it is not un-common for employment figures to move like this.

 

Next week’s potential market moving reports are:

• Monday July 30th – Pending Home Sales
• Tuesday July 31st – Case-Shiller Home Price Index
• Wednesday August 1st – ADP Employment Report, Construction Spending
• Thursday August 2nd – First Time Jobless Claims, Factory Orders
• Friday August 3rd – National Unemployment Rate

 

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.

 

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

 

 

Talk of tariffs and trade concerns continue to help keep mortgage rates low. However, the strong economy and labor market could pressure rates higher.
Recent comments by President Trump about raising rates are not likely to affect the Fed’s plans. One or even two policy rate increases are still expected
for 2018.
The European Central Bank is seeing inflation increase overseas and should end economic stimulus this year. This could pressure future mortgage rates higher.

 

Existing home sales continued to slide in June, to a 5-month low. A persistent shortage of properties on the market drove house prices to a record high.
New home sales also dropped to an 8-month low in June. Demand remains high, but builders are struggling with labor shortages and material costs.
Fifteen more states can now accommodate fully digital home closings. A total of 265 million homebuyers can now enjoy fully online closing processes across
the country.

I have a few jokes about being unemployed, but it doesn’t matter because none of them work.

 

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
rate trends can differ from our own and are subject to change at any time.

 

Sincerely,
Fred Kreger
American Family Funding
Certified Mortgage Consultant
NLMS # 1850 / 214640 BRE# 01215943 / 01371184
(661) 505-4311
Fred.Kreger@affloans.com
28368 Constellation Road
Suite 398
Santa Clarita, CA
91355

www.fredkreger.com

 

©2018 American Pacific Mortgage Corporation (NMLS 1850). All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs
shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products
may not be available in all states and restrictions apply. Equal Housing Opportunity.

 

 

 

 

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