This week the Fed released its “beige book,” showing that in early March through mid-April, 10 of 12 Fed bank districts reported an expanding economy, up from eight regions reporting growth in the previous report. Consumer spending increased in most areas, as did manufacturing. Home sales were solid in many parts of the country with housing starts picking up in the Boston and San Francisco areas and modestly in the New York, Philadelphia and Atlanta regions. Loan demand was also up in most areas. The Fed says the labor market remains mixed overall.
The Labor Department reported that the consumer price index rose by a seasonally adjusted 0.2% in March from the prior month. It rose by 0.1% in February. Core prices, which strip out volatile food and energy costs, also rose 0.2%. Consumer price inflation for March is up 1.5% from 1.1% in February although still below the Fed’s 2% target for annual inflation. Retail sales are also up, rising by 1.1%, the biggest gain since September 2012. Another positive sign is that inflation-adjusted average weekly earnings rose 0.3% in March from the prior month; this means that consumers have a little additional spending power.
Stocks closed a day early this week but had a strong finish on Thursday as positive corporate earnings from Morgan Stanley, General Electric, and PepsiCo helped lift the markets. The Nasdaq continues to struggle over concerns that stocks are overvalued and that there is a new tech bubble. The Dow rose this week to 16,408.54 up 2.38% from last week’s close of 16,026.75. The Nasdaq was up 4,095.52 up 2.40% from last week’s close of 3,999.73. The S&P 500 also was lower, ending the week at 1,864.85, up 2.70% from last week’s 1,815.69.
The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate dropped to 4.27%, the rate was 4.34% last week. The 15-year-fixed also dropped to 3.38% from last week’s 3.47%. A year ago the 30-year fixed was at 3.41% and the 15-year was at 2.64%. A recent prediction from the Mortgage Bankers Association stated that this could be the lowest year for mortgage initiation in 14 years, down 39% from 2013 to $1.065 trillion in single-family loans. Unfortunately, rates rose Thursday and we are back to about 4.5% for 30 year loans at $417,000 and under. Higher loan amounts are closer to 4.75% for 30 years. 15 year fixed for 417,000 and lower loan amounts are about 3.5% and higher loan amounts are about 3.75%.
The 10 year Treasury bond yield ended the week at 2.73% (on Thursday, there was no report on Friday). It was 2.63% last Friday and 1.73% a year ago.
U.S homebuilder confidence rose in March. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 47 in April from 46 in March. Readings below 50 still mean that builders view sales conditions as poor. This was the third straight month the reading was under 50; it was above 50 from June to January. The overall confidence index was below 50 in all four regions of the United States — 36 in the Northeast, 45 in the West and 48 in the Midwest and South. However the index measuring their confidence in home sales over the next six months rose to 57, the highest since January.
Housing starts rose 2.8% in March to an annualized pace of 946,000, units short of economists’ predictions of a rate of 970,000. February’s starts were revised to show a 1.9% increase rather than a –0.2% downturn. Groundbreaking for single-family homes in March was up 6.0% to a 635,000-unit pace. Permits to build homes fell -2.4% in March to a 990,000-unit pace with permits for single-family homes rising 0.5%.
The California Association of Realtors® saw sales for March totaling a seasonally adjusted annualized rate of 367,000 units, up 1.4% from February’s revised 361,790 but down -12.3% from March 2013’s rate of 413,810. This was the eighth straight decline on a year-over-year basis. The median price of $435,740 was 7.7% greater than February’s $404,250 median and 14.9% higher than March 2013’s $379,000. There have been over two years of year-over-year price increases. For Los Angeles County the median sold price was $395,780, up 1.7% from February’s $389,080and up 16.1% from March 2013’s $340,890. Sales were up 20.4% over February but down -17.1%from last March.
Housing inventory according to C.A.R. was 4 months, down from February’s 4.7 months but strongly up from March 2013’s 2.9 months. Time on market fell to 35 days in March from 40 days in February but up from 29.4 days in March 2013
DataQuick’s numbers for March showed that sales were near a six-year low while prices hit a six-year high. Sales were down -14% from a year ago in the six-county Southland region to 17,638 properties but this was up 25.7% from February’s 14,027. The February to March gain was still under the average 36% increase generally seen between these two months. Prices were up 15.8% to a median price of $400,000 from $345,500 in March 2013, and up 4.4% from $383,000 in February. This is still -20.8% below the peak seen in 2007. The number of homes that sold for $500,000 or more increased 2.9% from one year earlier, while $800,000-plus sales rose 5.4%. In March, 35.1% of all Southland home sales were for $500,000 or more, up from 33.5% the month before and up from 27.8% a year earlier. For Los Angeles County alone, sales fell -15% to 5,915 properties from 6,962 a year earlier while the median price rose 14.5% to $435,000 from $380,000 last year.
Realtor.com’s National Housing Trend Report for March showed that a median nationwide price of $199,900 which was 5.3% higher than last year. The number of properties for sale rose9.5% above March 2013 levels to 1,841,844 units. The median age of inventory increased 22.9%above the year-ago figures, to 102 days on the market. For the Los Angeles-Long Beach MSA, the median list price was $459,990 which was up 12.2% from last March and up 2.2% from February. The amount of total listings was 29,983, up 29.3% from last year and up 11.1% from last month. The average age of inventory was 59 days, up 25.5% from a year ago and up 9.3% from last month.
Have a great weekend!
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