Let’s recap what the market did this week concerning housing.  Time to get excited about a little blurb from Rodeo Realty President Syd Leibovitch.

Average long-term U.S. mortgage rates rose this week, marking their largest one-week gain this year. Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year loan jumped to 4.23% from 4.12% last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, rose to 3.37% from 3.26%.
At 4.23%, the rate on a 30-year mortgage is at its highest level since the week ended May 1, though it is still at a historically low level. Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note closed the week at 2.59% , up  from 2.54% a week earlier
The increase in the yield on the benchmark Treasury bond was stoked by speculation in financial markets that the Federal Reserve might abandon its nearly 6-year-old policy of keeping short-term rates at record lows. But at their meeting this week that ended Wednesday, Fed policymakers decided to keep the low rates, at least for a few more months.
Stocks jump up this week across the board. The Dow closed this week at 17,279.74 up from last Friday’s close of  16,987.51.  The S&P closed higher this week at 2,010.40 up from last Friday’s close of 1,985.54. The Nasdaq finishes higher this week as well closing at 4,579.79 up from last Friday’s close of 4,567.60.    This rise was due to higher than expected profits, good economic news, lower gas prices, a jump in consumer confidence and a stronger dollar. Unfortunately, when the stock market surges money comes out of safer investments like bonds and mortgage securities which forces interest rates higher. Stock market indexes are at or near record highs!
The Real Trends Housing Market Report for August 2014 data shows that housing sales decreased 5.2 percent from the same month a year ago.  The annual rate of new and existing home sales for August 2014 was 6.002 million units from rate of 6.334 million in August 2013.  Housing prices rose an average of 4.1 percent from August 2013, a slight decrease from the previous month. Price increases have now settled to a mid-single digit growth rate for the past four months.
Housing unit sales for August 2014 decreased 1.4 percent in the South, the best performance in all regions. Midwest unit sales were off 4.4 percent, the Western region saw sales decrease 5.6 percent and the Northeast saw sales units decrease by 13.8 percent.
The average price of homes sold in August 2014 in the Midwest region increased by 6.6 percent the best result in the nation. The Western region saw average prices increase 5.8 percent, average prices in the South were up 5.3 percent and the Northeast had an average price increase of 2.4 percent. The August housing data show that sluggishness in the general economy with lower than expected job growth, stagnant household income and tight credit conditions are taking the expected toll on housing sales,” said Steve Murray, editor of the REAL Trends Housing Market Report.
Rising prices have driven many investors from the market, and while foreign purchases remain strong, first time home buyers are still absent from the market. In fact, in many jurisdictions the percent of first time home buyers as a percent of all buyers remains significantly below the rate for prior years. Unless and until this is remedied, housing sales will likely remain flat to negative.
The California Employment Department reported Friday that The California Unemployment Rate stayed at 7.4% in Augustunchanged from July despite the state adding 44,200 nonfarm jobs in AugustThe state has added 1.4 million Jobs since February 2010 when the jobless rate peaked at 12.4%
The California Association of Realtors Reported that the median price for a home increased 3.3% in August to $486,280 from $464,750 in July.  They also reported that 394,280 housing units closed escrow in August down 9.3% from August 2013 when 434,910 housing units closed escrow. This marked the 13th straight month with a year over year decrease in the number of housing units closed. It also marked the 10th straight month that sales were under 400,000 units. Inventory  levels of single family residences were up slightly to 4 month supply in August from a 3.8 month supply in July. A six month supply is considered normal.
We are seeing our market heat up again after slowing a little in August. Many of the homes that were sitting have sold. Our open escrows  have increased in number. I would not be surprised to see the California Association of Realtors’ October closing numbers increase over the August numbers. Lets wait and see! Perhaps, we will top that 400,000 monthly unit barrier in October!

Have a great weekend!

Syd


If you’d like more information on the San Fernando Valley or Los Angeles, or to have help looking for your next home, please feel free to reach out! I’m happy to help, no obligation.

Find Your New Home!
Contact Me Today!