With the first two months of 2015 in the books the theme for This Week in Real Estate is “record highs.” Below are a few of the highlights from the final week in February that influence our business:
* Pending home sales hit highest level in 18 months. U.S. home buyers signed more contracts to buy existing homes in January than they have since August of 2013, according to the National Association of Realtors. Its monthly index of so-called pending sales, an indicator of future closed sales, rose 1.7 percent month-to-month, and is now 8.4 percent higher than it was a year ago. This is the fifth straight month of year-over-year gains, and the gains are increasing. “Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” said Lawrence Yun. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.” Full Story… http://www.cnbc.com/id/102460499
* Construction optimism at 20-year high. Wells Fargo’s 2015 Construction Industry Forecast, presents results of a survey it has conducted for the last 19 years of industry executives representing large and small contractors as well as equipment distributorships and equipment rental companies. The survey attempts to track industry optimism using what it calls the Optimism Quotient (OQ). John Crum said that after tumbling to an all-time low of 42 in January 2009, the OQ has climbed steadily, reaching new highs in three of the last four years and landing this year at 130, up six points from 2014. “In the nearly 20 years that we’ve been tracking the OQ we’ve never seen such widespread optimism about the direction of the industry compared to the prior year,” said Crum. Full Story… http://www.mortgagenewsdaily.com/02262015_construction_forecast.asp
* U.S. new-home sizes set record last year. The median size of completed homes last year hit a new record of 2,415 square feet, according to the Commerce Department. Home sizes grew in every year between 1995 and 2007, but they fell during the recession as builders went small to compete with cheap foreclosures. There are signs that home sizes won’t set new records this year. The size of homes in which builders started construction ticked down last year after peaking in the first quarter. That could be a sign builders have concluded that they need to refocus on the entry level buyers if they want to increase sales.” Full Story… http://blogs.wsj.com/economics/2015/02/25/u-s-new-home-sizes-set-record-last-year/
* Federal Reserve chairwoman, Janet Yellen, counsels patience on interest rate increase. “If economic conditions continue to improve, as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis,” Ms. Yellen said. The central bank is pleased with recent economic growth, but convinced there is room for improvement and still pondering when to start raising interest rates. Ms. Yellen said the next step would be an announcement, which could come as soon as March, that the Fed would begin to consider raising its benchmark rate at each policy-making meeting. Patience remained the Fed’s watchword. Full Story… http://www.nytimes.com/2015/02/25/business/economy/fed-chief-yellen-testifies-before-congress.html
Have a productive week!