"The single biggest problem in communication is the illusion that it has taken place." ~ George Bernard Shaw, Irish writer
INFO THAT HITS US WHERE WE LIVE... That Shavian witticism notwithstanding, the communication from Realtor.com was very clear. The National Association of Realtors (NAR) website offered ample evidence it should be a busy home-buying season this spring. In February, the number of properties for sale was up 10.1% over February a year ago, to 1,744,032 units. The reason may simply be that prices are up too. At $199,000, the median list price is 7.6% higher than it was in the same month last year. But the median age of the inventory has crept up as well, to 114 days.
Inventories, however, are still low. The NAR said the supply of existing homes, at 2 million listings, has been holding around a 13-year low, while new home inventory, at 180,000 listings, is at a 50-year low. Yet consumer feelings about home ownership remain strong. Another national listing site reports that more renters than not aspire to be homeowners. And nationwide, 10% of renters said they plan to purchase a home in the next 12 months. That's an estimated 4.2 million first time home buyers who could flood the market in the next year.
Innovation can come from looking to improve everyday things, what the late comedian George Carlin called "vuja de"--seeing mundane items through fresh eyes.
The mood was a bit distraught on Wall Street, with traders looking ahead to Crimea on Sunday when the region held a referendum on whether its future will be as part of Ukraine or Russia. Other global concerns included questions about the health of the Chinese economy, thanks to their "first" corporate bond default and soft data out of the Middle Kingdom. It was the worst week since late January for the S&P 500 and the Dow Jones Industrial Average, while the tech-heavy Nasdaq suffered its biggest weekly drop since April last year. The sparse economic data actually wasn't that bad.
Weekly jobless claims unexpectedly beat expectations, dropping by 9,000, to 315,000. Continuing Unemployment Claims fell 48,000, to 2.86 million. Retail Sales were up 0.3% in February, so cold weather can't fully explain the December and January weak numbers. Consumers clearly remain confident enough to keep spending their money no matter what the weather is doing. Unfortunately, this confidence was not corroborated on Friday when the preliminary Michigan Consumer Sentiment reading for March didn't hit its forecast.
The week ended with the Dow down 2.4%, to 16066; the S&P 500 down 2.0%, to 1841; and the Nasdaq down 2.1%, to 4245.
Worries around the world set off a flight by investors to the safety of bonds. Treasuries saw strong gains. The FNMA 3.5% bond we watch headed up nicely, finishing the week up .84, to $101.02. National average fixed mortgage rates inched up during the week ending March 13, according to Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. The Mortgage Bankers Association reported their unadjusted purchase loan index was up 1% for the week ended March 7.
This information was provided by Danene Strand (NMLS# 442493) at Veritas Funding.