Mortgage Market News for the week ending December 28, 2012.
The fiscal cliff talks were the primary influence on mortgage rates again this week. A lack of progress on reaching a deal caused investors to shift to safer assets such as bonds. As a result, mortgage rates ended the week a little lower.
The housing sector data released this week was again encouraging. November New Home Sales rose 4% from October to the highest level since April 2010 (when the homebuyer tax credit was about to expire). November Pending Home Sales, a leading indicator, also rose to the highest level since April 2010, and were 12% higher than one year ago. According to the NAR Chief Economist, “Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”
Housing ends the year on a definite upswing. Existing Home Sales rose roughly 10% during 2012, and the National Association of Realtors (NAR) forecasts a similar increase for 2013. Total housing inventory of available existing homes is at the lowest level since 2005. The October Case-Shiller 20-city home price index showed an increase of 4.3% from one year ago. In addition, mortgage rates end the year near record low levels, around 50 basis points lower than this time last year.
Also Notable:
• Consumer Confidence dropped to the lowest level in four months
• The 4-week average of Jobless Claims fell to the lowest level since March 2008
• Oil prices rose to $91 per barrel, the highest level in two months
• The value of the dollar versus the yen rose to a 29-month high
Average 30 yr fixed rate:
Last week: -0.01%
This week: -0.03%
Stocks (weekly):
Dow: 13,025 -150
NASDAQ: 2,975 -25
Week Ahead
The fiscal cliff talks will continue to be a major influence on mortgage rates heading into the new year. The biggest economic report next week will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, ISM Manufacturing and Construction Spending will be released on Wednesday. The detailed FOMC Minutes from the December 12 Fed meeting will also come out on Wednesday. Factory Orders and ISM Services are also scheduled for Friday. Mortgage markets will close early on Monday and will be closed on Tuesday in observance of New Years Day.
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