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News Encouraging on Mortgage Rates, Existing-Home Sales
Within the past week, home builders received encouraging news on mortgage rates and existing home sales.
On Thursday, Freddie Mac announced that the average 30-year fixed-rate mortgage was 5.87% for the week, according to its Primary Mortgage Market Survey, down from 6.13% for the previous week and 6.16% for the same time a year earlier.
One-year Treasury-indexed ARMs averaged 5.15%, up a tad from 5.14% during the prior week but down from 5.40% a year earlier.
“Mortgage rates fell this week as various actions were taken to improve market liquidity,” said Frank Nothaft, Freddie Mac’s chief economist.
“In addition,” he said, “the inflation report from the Consumer Price Index reflected weaker price increases than consensus expectations. Unchanged in February both including and excluding food and energy costs, it is the first time the core CPI did not report a monthly increase since November 2006.
“Meanwhile, retail sales fell by 0.6% in February, contrary to the consensus forecast of a 0.2% increase, signaling that the condition of the economy might be weaker than previously thought,” Nothaft said. “Slowing consumer spending and weak employment conditions are among the concerns behind the Fed’s decision to lower the target federal funds rate by 0.75 percentage points in the most recent Federal Open Market Committee meeting.”
A Sign of the Market Stabilizing
On the nation’s housing market, the National Association of Realtors® reported on March 24 that existing-home sales increased in February for the first time in seven months.
Existing-home sales — including single-family, townhomes, condominiums and co-ops — rose 2.9% last month to a seasonally adjusted annual rate of 5.03 million units from a pace of 4.89 million in January. Sales, however, remained 23.8% below the 6.60 million-unit rate of a year earlier.
The national median existing-home price for all housing types was $195,900 in February, down 8.2% from a median price of $213,500 a year earlier.
“We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” said Lawrence Yun, the association’s chief economist.
“Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand,” he said. “As inventories are drawn down, prices in many markets should go positive later this year.”
 Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on Thursday, April 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
 Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
 Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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