Housing Snapshot
Mortgage interest rates were up last week for the seventh week in a row as expectations continued to grow that the Federal Reserve Board would start increasing its federal funds rate sooner rather than later. Prior to indications of a turnaround in the job market in March, many economists weren't expecting to see any change in Fed policy until after the November elections. Now those same economists have moved up the date to early or mid-summer, and Chairman Greenspan has announced that deflation is no longer a concern for the central bank. Keeping inflationary pressures under control in a vigorously expanding economy will be shaping Fed policy in the period that lies ahead. The cost of a 30-year, fixed-rate mortgage is now above the 6% threshold, but as the cost of home financing does rise over the coming 12 months it is still expected to remain at relatively affordable levels. News from the Labor Department on employment in April confirmed that the national economy is at long last perking up. The unemployment rate for the month dropped from 5.7% to 5.6%, and 288,000 new jobs were created. Job creation in this year's first quarter was also revised upward by 66,000. Worker productivity in the first quarter increased at a 3.5% rate, compared to 2.5% for the same quarter a year earlier. The cost of framing lumber continued to climb, reaching $460 per 1,000 board feet last week, according to Random Lengths. While remaining at sky-high levels, plywood and oriented strand board prices weakened slightly. The mill price for 15/32-inch 3-ply CDX southern westside plywood was $520 per 1,000 square feet and OSB was $490. [ MORE ]
Mortgage Interest Rates
30-Year Fixed-Rate: 6.12%
15-Year Fixed-Rate: 5.47%
1-Year ARM: 3.76%
Housing Starts - Mar. 2004*
Total: 2.007 million
Single-Family Starts: 1.599 million
Multifamily Starts: 408,000
New Home Sales Mar. 2004*
1.228 million
Existing Home Sales Mar. 2004*
6.48 million
* Seasonally adjusted annual rate