|For the Week Ending January 19, 2018|
The Stock Market and the Economy:
Stocks continue to rise, hitting 26,000 this week. Investors continue to pour more money into the market to ride the rising tide. Corporate profit season is upon us and is expected to show great results for the 4th quarter of 2017. Results will be released over the next couple of weeks. Stock market euphoria continues over the tax plan passed a couple of weeks ago.
It was inevitable that talk of regulation on cryptocurrencies was bound to heat up. More and more countries are announcing plans to either regulate, or completely prohibit trading. Bitcoin, which is the most know currency, has lost almost 50% of its value from its all time high just a few weeks ago. Most other currencies have taken it on the chin with losses in the 25%-40% range.
Housing Market Index:
The National Association of Home Builders continue to believe strongly in the housing market. The latest report shows builder confidence at or near all time highs. One of the main factors driving this sentiment is the continued high flow of traffic at properties. Even first-time buyers are showing up at new construction sites which has been something that was noticeably absent in recent years.
Despite the surprising drop in single family starts, the latest data on new home construction activity continues to point to a strong housing market. Single-family starts declined 11.8 percent which certainly was not anticipated by anyone. Weather in the winter months can play a factor in this data and can cause wide movement in this report.
Permits for new single-family construction came in with a very strong annualized rate of 881,000, representing an increase in 1.8 percent for the month of December. Lack of available inventory has been the main culprit holding down sales. However, completions of single-family homes jumped 4.3 percent, which is likely to further bolster housing growth in the coming months.
The highest rates in ten months did not impact mortgage loan activity. Purchase and refinance application both increased by 3.0 percent and 4.0 percent respectively in the week ending January 12th.
Next week’s potential market moving reports are:
• Tuesday January 23rd – Richmond Fed Manufacturing Index
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.
|Jobless claims plunged to the lowest level since 1973 this week, the biggest drop since April 2009. Labor market strength can pressure rates higher.|
|According to a recently released Fed report, the economy and inflation expanded at a modest-to-moderate pace from November to the end of 2017.|
|Inflation, which pressures interest rates to move higher, is not increasing across the U.S. consistently. West coast metro areas are showing higher inflation.|
|Although homebuilder confidence was down slightly in January, it’s still strong. Builders’ biggest concerns remain costs of material and labor shortages.|
|New housing starts fell more than expected in December. However, the moderation is likely to be temporary amid strong demand for housing.|
|Mortgage purchase applications jumped 4.1% last week, and volume rose 5.6% over last year. Speculation is that consumers fear rates may be increasing.|
The early bird may get the worm, but the second mouse gets the cheese in the trap.
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
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