Home sales rose across the board for the month of February, according to data collected by the National Association of Realtors (NAR). New home sales increased to a 539,000 annual rate, up from the revised 500,000 in January, at the highest level since February 2008. There is an increasing demand for low-middle income housing, yet the supply of new homes in lacking. It is likely that this demand will encourage builders to expand construction of new homes.
Existing home sales saw a slight increase of 1.2%, going from a 4.82 million annual pace in January to 4.88 million in February. February’s 1.2% rise was less than analysts expected, as they hoped to reverse the 4.9% drop in existing home sales from January. Nevertheless, the year-on-year rate for existing homes was up 4.7% in February, showing the strongest reading since October 2013. Similar to the new home market, existing home sales are curbed by higher home prices and the limited selection of houses available to buyers.
Jobless claims fell by 9,000 in the March 21 week to 282,000, down from 291,000 the previous week, and the 4-week average decreased 7,750 to 297,000. Although this is a sizable drop in claims, the 4-week average is still slightly higher than the month-ago comparison.
This week will bring updated reports on employment and construction spending.
Mortgage News & Rates
Mortgage Applications are at the highest level since January, as the total volume of applications rose by 9.5% in the March 20 week. Purchase applications went up 5%, while refinancing applications increased by 12%. Steadily decreasing mortgage rates and continued job market improvement seem to be the biggest influences.
Nationally, mortgage rates are nearing record lows, and conventional rates are the lowest they have been since January. In their post-meeting press release last week, the Federal Reserve commented that it expects inflation rates to stay “below-target” for a while longer, which contributed to the low mortgage rates. The weekly Freddie Mac rate survey calculated that national rates for the 30-year Fixed program also decreased, going from 3.78% on March 19 to 3.69% on March 26.
For detailed information about local mortgage rates for a variety of loan programs, take a look at our weekly Mortgage Rate Update. As rates continue to drop, now is a great time to consider a home purchase or refinance! Give us a call at 805.543.LOAN for a free, customized rate quote.