Economic Update

Dated: 03/30/2016

Views: 883

Mortgage rates have been relatively stable since their improvement on March 16 following the Fed meeting. Neither the economic data nor the terrorist attacks in Brussels caused much movement over the past week. Mortgage rates ended the week with little change.

In a light week for economic news, housing market data carried the most interest. February results for both existing and new home sales were released. Both are important reports. Existing home sales make up roughly 90% of all home sales. Even though new homes represent only 10% of home sales, the construction activity necessary to bring new homes to the market is a significant contributor to overall U.S. economic activity and job creation.

In February, existing home sales were disappointing. The report showed a decline of 7% from strong January numbers. Existing home sales still were 2% higher than a year ago. Economists attributed the weakness in February to tight inventories and rising prices in many regions, and to bad weather in the Northeast and Midwest. The report did show that inventories increased a little in February. Sales of newly constructed homes were better. In February, new home sales increased 2% from January to an annual rate of 512,000. If this pace continues for the remainder of the year, then 2016 would see the highest level of new home sales since 2007. Also of note, the total number of homes under construction rose to the highest level since 2008.

Source: MBS Quoteline

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David Sarnowski

David is a seasoned real estate professional, specializing in residential sales, rentals and investment properties. David is a 15 year resident of the New Jersey Gold Coast, with the local knowledge n....

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