Evidence continues to show that the housing market is making a comeback. Here are just some of the positive reports that came in over the last few weeks:
- Housing starts spiked by 7 percent in March to come in at the highest rate since June 2008. In addition, housing starts were up 47 percent since the same period last year.
- The number of mortgages behind on payments or in foreclosure fell in March to the lowest mark since 2008.
- New Home Sales for March increased to come in slightly better than estimates.
- The Mortgage Bankers Association reported small gains in the numbers of loan applications, refinances and purchases.
Not all of the housing news was good last month. Building permits, which are a sign of future construction, did decline slightly. And Existing Home Sales for March came in slightly below expectations. But overall, the housing-related reports were strong and provided further evidence of improvements in the housing sector.
Other economic news wasn’t as positive. Retail Sales for March came in below expectations and marked the largest decline in nine months. However, the rise in payroll taxes, which began in January, is likely a big part of the decline in spending. Consumer Sentiment also fell to its lowest level since July of 2012. And in the manufacturing sector, the Empire Manufacturing Index was much weaker than expected and below the previous month. Those reports indicate that we may see another economic malaise this spring, like we have seen the last couple of years.
What does this mean for home loan rates?
The uncertainty of the economy and continuation of the Fed’s bond purchase program (known as Quantitative Easing) should continue to benefit bonds and home loan rates. That makes now an ideal time to consider purchasing a home or refinancing