This Week in Real Estate: April 4, 2016

As the first quarter came to a close news This Week in Real Estate was very favorable regarding the second quarter spring selling season. Pending home sales reach a 7-month high and the Bureau of Labor released a better than expected “Jobs Report,” especially in the construction sector. Below are a few highlights from the final week of March that influence our business:

* Pending Home Sales Reach Highest Level in 7 Months. Pending home sales rose solidly in February to their highest level in seven months and remain higher than a year ago, according to the National Association of Realtors. Led by a sizable increase in the Midwest, all major regions except for the Northeast saw an increase in contract activity in February. The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.5 percent to 109.1 in February from a downwardly revised 105.4 in January and is now 0.7 percent above February 2015 (108.3). Lawrence Yun, NAR chief economist, says pending sales made promising strides in February, rising to the highest index reading since last July.
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* Freddie Mac: 2016 Will Be Housing’s Best Year in a Decade. Freddie Mac predicts total home sales, housing starts and house prices will continue to rise this year, reaching their highest point since 2006, according to its March Outlook that was released Thursday. Freddie Mac does not expect inventory and affordability challenges from keeping the market from reaching its highest level. It also expects the 30-year mortgage to remain below 4% throughout the home buying season, until the second half of the year. “Housing markets are poised for their best year in a decade,” Freddie Mac Chief Economist Sean Becketti said. “Low mortgage rates, robust job growth and a gradual increase in housing supply will help drive housing markets forward. Low levels of inventory for-sale and for-rent and declining housing affordability will be major challenges, but on balance the nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017,” Becketti said.
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* Jobs Report Beats Expectations. March was another strong month for the US labor market, as jobs and wage growth increased more than expected. There were 215,000 additional nonfarm payrolls, according to the Bureau of Labor. Job gains were strong in retail, construction, and healthcare. The active portion of the US economy’s labor force grew for a fourth straight month, as the rate rose to 63% in March from 62.9%. An abundance of job openings is drawing people into the labor force at a near-record rate. The job report posted that construction employment rose by 37,000 in March, with job gains occurring among residential specialty trade contractors (+12,000) and in heavy and civil engineering construction (+11,000). Over the year, construction has added 301,000 jobs.
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Have a productive week!


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