Over in the housing sector, the Case Shiller 20-city Index rose to 12.8 percent in August on a year-over-year basis. From July to August there was a 1.3 percent increase. Overall this was a solid report, but note that double digit gains are not expected to continue as the uptick in rates have slowed price appreciation in many parts of the country. In addition, Pending Home Sales declined by more than expected in September. The drop was due in part to declining affordability, higher home loan rates, and consumer uncertainty surrounding the government shutdown. Also impacted by the shutdown, Consumer Confidence in October came in below expectations and well below the September reading. The Retail Sales Report for September showed that the shutdown also impacted consumer spending habits. What does this mean for home loan rates? Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market via its Quantitative Easing program. The Fed has said that the continuation of these purchases remains dependent on economic data. And recent data shows that the housing sector recovery has slowed in recent months, plus Gross Domestic Product (the broadest measure of economic activity) and employment figures remain weak. In its Policy Statement after last weeks meeting of the Federal Open Market Committee, the Fed said it has decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. This should help keep home loan rates attractive through the remainder of 2013. The bottom line is that now remains a great time to consider a home purchase, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you!
Posted on: Wed, 06 Nov 2013 16:46:11 +0000
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