In the approach to the fiscal cliff, stocks have trended lower as elected officials’ rhetoric becomes more exasperated. By all accounts, little progress has been made.
At the same time, economic news continues to be relatively uninspiring. Third quarter gross domestic product (GDP) was revised upward to 2.7 percent, but this is still below the target rate of 3.0 percent. Manufacturing contracted during November, with employment being hit especially hard. Weekly unemployment claims had a large jump during November (in part influenced by the aftermath from Hurricane Sandy) as the four-week average moved over 400,000 – well above the 460,000 to 470,000 we saw in October. The November employment report will attract quite a bit of attention as an economic indicator on Friday. Make sure you check out our website for a full breakdown.
Housing news, on the other hand, continues to be a bright spot.
Home prices across the nation have continued their steady growth, as the S&P/Case-Shiller 20-city price index showed year-over-year growth for the fourth-straight month. This is the perfect four-month winning streak since 2010, when the housing tax credit boosted the market.
Pending home sales in the U.S., meanwhile, hit a five-year high in October. Construction spending rose 1.4 percent in October and private single-family residential spending jumped 3.0 percent. Also in October, housing starts rose 3.6 percent.
On the San Luis Obispo County level, we have positive news as well. We have been doing our city-by-city rundown of 2012 real estate trends in local cities, and we were impressed to learn that home sales in Los Osos are up 47 percent in 2012. The 176 single-family residential sales to date is the highest total since 2005. Of the eight SLO County cities we have previewed each has shown improvements in either sales or prices in 2012.
Mortgage rates have remained largely unchanged from our previous report. The 30-year fixed is advertised at 3.000 percent (3.113 percent APR) and the 15-year fixed is at 2.375 percent (2.600 percent APR).* For our 10 loan program rate tracker, including the USDA, FHA, and VA rates, please go HERE.
*APR is subject to increase and terms subject to change. APRs may very depending on loan details such as points, loan amount and loan-to-value, your credit, property type and occupancy. Closed rate and APR assume a rate and term refinance of a single family detached owner-occupied primary residence, loan amount $417,000 ($561,200 for high balance), and a minimum FICO score of 760. Situations vary based on applicant.