Jobs and interest rates are two key indicators of any real estate market and both topped the headlines This Week in Real Estate. The number of jobs created in June massively exceeded analyst expectations and refi’s hit an 18-month high due to ultra-low rates. Below are a few highlights from the first week of July that influences our business:
* This Will Be The Best Summer For The Housing Market in a Decade. Following the strongest spring in 10 years, the residential real estate market should continue to see growth throughout the summer despite some growing economic headwinds. Through May, year-to-date home sales are up 6% over last year, which was the best year since 2007, according to the National Association of Realtors and Commerce Department data. Meanwhile, home prices are again up 5 to 6 percent, according to Case-Shiller and other sources. For at least the next 15 years, the two largest generations in history, millennials and baby boomers, will be making critical decisions about where and how they want to live. The economic background may be softening, but it is still positive. Unemployment continues to decline and is approaching full employment. Consumer confidence is managing to stay relatively strong despite election year jitters about the future. The decline in rates from the beginning of the year until now has more than offset the rise in prices. Eventually the combination of higher prices and higher mortgage rates will lead to softening demand across the U.S. However, that is not imminent and now has very little chance of occurring before late fall or winter. And, interestingly, the two factors holding housing back – limited new construction and tight credit – are preventing the factors that normally lead to oversupply and trigger a downward cycle in real estate.
Full Story… http://www.cnbc.com/2016/07/08/this-will-be-the-best-summer-for-the-housing-market-in-a-decade-commentary.html
* U.S. Economy Posts Largest Job Gains in Eight Months in June. U.S. job growth surged in June as manufacturers and other employers boosted hiring. Nonfarm payrolls increased 287,000 jobs last month, the strongest month of hiring since last October, the Labor Department said on Friday. The boost in hiring in June catapulted the S&P 500 right near its record closing high and lifted all major U.S. stock indexes back to where they were before the U.K.’s vote to leave the European Union. The S&P 500 rose 1.5% to close at 2129.90. In intraday trade, it rose as high as 2131.71, climbing above its record closing level of 2130.82, hit on May 21, 2015. In the bond markets, the 10-year Treasury yield settled at a record low of 1.366%.
Full Story… http://www.reuters.com/article/us-usa-economy-payrolls-idUSKCN0ZO1CZ?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29
* The Brexit Impact is Real: Refis Jump to 18-Month High. Brexit’s impact on mortgage applications is in and looks like borrowers cashed in on the ultra-low interest rates. Mortgage applications surged 14.2% from one week earlier, significantly driven by refinance activity, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 1. The Refinance Index soared 21% from the previous week to the highest level since January 2015. The refinance share of mortgage activity increased to 61.6% of total applications, the highest level since February 2016. “Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over 3 years,” said Mike Fratantoni, MBA’s Chief Economist.
Full Story… http://www.housingwire.com/articles/37453-the-brexit-impact-is-real-refis-jump-to-18-month-high?eid=322520585&bid=1452343