Housing Reports and Real Estate Professionals Differ on Strength of Housing

Who should we believe about housing…the economic reports released this week or the real estate and mortgage professionals in the field every day throughout the United States?

This week, three different housing reports were released indicating that the real estate market is not as strong as people think.  However…when you speak with most real estate and mortgage professionals you will find that they are busier than they have been in quite a few years working with buyers.

The first housing report of the week was the housing market index.  The index shows some improvement this month, which is an indicator that the new home market is improving slightly.  The contrast to this is when you speak to an agent working at a new home construction site they will tell you that the volume of buyers coming is relentless.

The irony of the housing report is that it indicates that buyer traffic has slowed dramatically; yet, in every market I have checked, nothing could be further from the truth.  I may not have access to all the data these so called experts have…buy I cannot find a single market in the U.S. that has anything but a dramatic increase in buyer traffic.

The second housing report was for April housing starts, which indicated a slow down. However, housing permits increased more than expected.  April housing starts declined 16.5 percent after rising 5.4 percent in March. The bright side to the report is that April starts are 12.1 percent higher than the same time last year.  The key indicator to focus on in this report is that multifamily construction was responsible for the majority of the reported decline.  Multifamily construction dropped 38.9 percent after a 25.6 percent gain in March. The single-family aspect of new construction only slipped 2.1 percent in April after declining 4.4 percent the month before.

Mortgage rates have quickly reversed direction and have been rising for just over a week.  The recent upward movement has negatively impacted mortgage applications for purchases and refinances.  Mortgage applications for purchases and refinances both declined by 4.0 percent and 8.0 percent respectively.  The good news is that despite the decline, mortgage applications for purchases still remain at the highest point since the real estate meltdown.

Economic reports for next week are:

• Wednesday May 22^nd - MBA Report, Existing Home Sales and FOMC Minutes
• Thursday May 23^rd - First Time Jobless Claims, FHFA House Price Index and New Home Sales
• Friday May 24^th – Durable Goods Orders

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

DRE Lic # 01520422
NMLS # 214851   

 

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