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CCL Market Update: Housing Starts, Jobless Claims, Consumer Confidence, Loan Programs and Rates

Reports on the housing market continue to improve this week, with news that housing starts rebounded 4.4% in December after a 4.5% decline in November. This has been attributed primarily to the increase in single-family permits, which has risen 4.5% compared to a year ago. In fact, groundbreaking for single-family homes is at its highest level in nearly seven years, which may signal that construction will contribute much more to U.S. economic growth in 2015. The increase in construction of single-family homes indicates that the industry is beginning to focus on the biggest part of the market, and may have been encouraged by gains in employment and consumer confidence.

Numbers for the groundbreaking of multi-family homes fell 0.8%, and multi-family permits fell 11.8%. However, since single-family houses accounted for 64% of all housing starts in the past year, all groundbreaking in 2014 increased 8.8%, the highest since 2007. An increase in home construction is due to a higher demand for new homes, and some developers are saying that the demand is the strongest since the recession, which ended in June 2009. Low mortgage rates, gradually easing credit standards and a general improvement in the job market should continue to lead to improvements in the housing market.

Unemployment claims are inching higher in this week’s reports. Jobless claims at the beginning of January have been largely attributed to the expected annual post-holiday layoffs. The claims reported for January 17 totals around 307,000, which is generally considered a healthy level. Additionally, the ratio of unemployed people for every job opening is the lowest since early 2008, and job openings are nearing 14-year highs.

January has thus far seen an improvement in American consumers’ expectations for the economy, reaching the highest level in the last four years and likely due to the low gas prices and improved job market. Of those polled by the Bloomberg Consumer Comfort Index, 36% said the economy is getting better, up from 32% last month. Economic gains were largely reported among women, full-time workers, 18-34 year-olds, and Democrats, although advances were also reported from married adults and those with at least some college education.

In the 2015 State of the Union address on Tuesday evening, President Obama stated that the U.S. is now ready to move past the recession of the last 15 years. He stressed that “middle-class economics works” and that “this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Next week will bring updated reports on new home sales, jobless claims, and consumer confidence levels.

Loan Program News

The biggest news on the loan program front continues to revolve around the lower annual mortgage insurance premiums that will be offered by the Federal Housing Administration (FHA). In the recent State of the Union address, President Obama once again discussed the lowering of mortgage insurance premiums as a way to expand homeownership in the U.S.  Read more about the changes offered by the FHA here.

Fannie Mae’s new “3% down” program remains of interest as well.  This option is beneficial for first-time buyers and current homeowners looking to refinance alike, and you can learn more about it here.


Mortgage Rate News

This week saw mortgage rates rise ever so slightly in some of the loan programs, while others remained unchanged. The 30-year Fixed Conventional rates rose marginally from 3.500% (3.570% APR) to 3.625% (3.663% APR), which shows an increase of less than ⅛ of a point in APR. The 30-year High Balance, Manufactured, Jumbo, and FHA 203k programs similarly showed slight increases. The 15-year Fixed, 30-year FHA, VA, and USDA programs all had numbers unchanged from last week’s rates.

Check out our Mortgage Rate Update page for more information about current mortgage rates.

For a more specific and personalized rate quote, give us a call at 805.543.LOAN!


Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile