The
new home market is a greater source of strength for the economy in that new
home sales jumped 5.7% in September.
This is the largest increase since the stimulus efforts of 2010. Although prices for new homes slid back just
by 3.2%, we are still seeing that median home prices are 11.7% higher from a
year ago. Despite all of the recent
strong news in housing, the stock market has not been reacting to it on account
of investors being focused primarily on employment and corporate profits
reports.
The
pending home sales report continues to lag behind the sales growth for new
homes. September’s increase of only .3%
was a little disappointing to most that were expecting an increase of 2.5%. The National Association of Realtors remained
upbeat in that the report was in positive territory and that the belief that
continued low interest rates will spur home purchases significantly in 2013.
Speaking
of corporate profits, overall the numbers released this week have been worse
than many analysts and investors anticipated.
Talk of an economic slowdown is really taking hold as more and more data
is showing that consumers are retreating in their spending habits once
again. Initially I thought that a big
portion of this could be due to the impending election; however, the slowdown
is on a global scale and not just in the United States.
First
time jobless claims have been swinging wildly over the last few months and this
week’s report is no exception. After
jumping up to 392,000 the prior week, the report this week shows a drop down to
a slightly better level of 369,000 which was in line with expectations. What is more concerning is that the prior
week’s report initially came in at 388,000 and then was adjusted up to
392,000. Had the initial report come in
at the higher level, you would have seen much more reporting about it because
that is coming dangerously close to the psychological 400,000 mark.
To
no one’s surprise the Fed left interest rates unchanged after this week’s
monetary policy meeting. In addition,
the Fed reiterated their commitment to keep interest rates exceptionally low as
well as continue their massive bond buying and mortgage backed securities
purchase programs to keep interest rates down.
Next
week’s economic reports are:
- Wednesday October 31st
- MBA Applications and ADP Employment Report
- Thursday November 1st
- First Time Jobless Claims and ISM Manufacturing Index
- Friday November 2nd – National Unemployment
I
appreciate your business and look forward to talking to you soon! Have a great
day!!!
Sincerely,
Cindy Tomlinson
Loan Officer
Loan Officer
USLending
Company
DRE
Lic # 01520422
NMLS # 214851
NMLS # 214851
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