Fed: Economic Activity Increases Due to Better Weather

Fed: Economic Activity Increases Due to Better Weather

Reports from the Federal Reserve’s 12 districts indicate economic activity has increased in most regions across the country since the end of February as the unusually harsh winter came to an end.

As in the last Beige Book report, the word “weather” appeared more than 100 times in the Fed’s latest release, though the theme this time was generally one of improvement rather than sluggishness.

According to the most recent update, eight districts—Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco—characterized their economic expansion from March to April as “modest or moderate,” while Chicago reported a pickup in growth.

Cleveland and St. Louis were the exceptions, each experiencing a decline in economic activity.

In housing, reports were varied from district to district; however, “across most Districts, home prices rose modestly and inventory levels remained low.”

Sales activity was harder to nail down: Kansas City, Dallas, and Richmond each reported a seasonal pickup in demand, while New York and Chicago continued to see mixed numbers attributed to cold weather. Major metros in the St. Louis and Minneapolis districts also reported weakness since the last Beige Book.

Meanwhile, homebuilding activity grew in most districts, with only St. Louis, Minneapolis, and Cleveland seeing significant declines, in part due to rising costs for raw materials.

Overall, the Fed reported increased loan demand, though residential mortgage borrowing was mixed or on the decline in the majority of districts.

“[O]nly Dallas and San Francisco reported slight growth. New York, Philadelphia, Cleveland, and Richmond cited the inclement weather as a factor reducing home sales and therefore mortgage borrowing,” the report said.

Credit standards were largely unchanged in most districts, though reports from San Francisco indicated tightening, while reports in Atlanta showed loosening standards.

On the same day the Fed released its Beige Book, chair Janet Yellen took the stage at the Economic Club of New York.

One of the biggest takeaways from Yellen’s speech was a projection of maximum employment—5.2 to 5.6 percent—by the end of 2016, which fits with the book’s report of “mixed but generally positive” labor market conditions across most districts.

However, she also admitted that there are factors beyond the monthly headline unemployment rate to consider when gauging economic expansion: “For example, the share of the workforce that is working part time but would prefer to work full time remains quite high by historical standards. … The low level of labor force participation may also signal additional slack that is not reflected in the headline unemployment rate.”

All things considered, Yellen’s comments and the tone of the latest Beige Book indicate the Federal Open Market Committee is likely to continue reducing the Fed’s monthly asset purchases in measured steps.

 

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Freddie Mac’s Outlook for April Giving “Mixed Signals”

Freddie Mac’s Outlook for April Giving ‘Mixed Signals’

Freddie Mac released its U.S. Economic and Housing Market Outlook for April, noting that the housing market continues to be “noisy,” giving mixed signals heading into Spring. The government-sponsored enterprise (GSE) did offer some specific market projections for the upcoming buying season.

Freddie Mac projects that new home construction will increase by 18 percent, while home appreciation will moderate to an annual growth of 5 percent for 2014.

The company also commented that due to a slower than normal first two months of the year, they are lowering their home sales projections slightly, from 5.6 million to 5.5 million.

“We’re getting mixed signals as we start the spring home buying season. Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” said Frank Nothaft, Freddie Mac VP and chief economist.

Nothaft added, “This is good news for those markets that have room to run on the house price appreciation front, but it’s also going to increase the affordability pinch in many markets, especially along the country’s east and west coasts. Two indicators that are supporting local housing activity are rising consumer confidence and declining unemployment rates.”

The housing market is being helped by local employment, which saw all 50 states experience a decline in unemployment rates, according to Freddie Mac. 18 states saw at least a half percentage point reduction in their unemployment rate over the previous three months, ending in February.

Although consumer confidence has waned slightly from an increase in interest rates, Freddie Mac found that confidence is tracking higher, and noted, “March was at the highest level since January 2008.”

The company believes that the 30-year fixed-rate mortgage will continue its path of gradual increases, eventually ending the year around 5 percent.

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Tips for Keeping your Electric Bills Low this Summer

RealtyTimes.com, April 19th, 2014
As the temperature begins to rise, so do the numbers on our electric bill. Greater energy output = greater dollar output. It’s a frustrating reality of summer. But there are a few tips and tricks that can help you keep your energy usage – and costs – down.
Full Story: http://realtytimes.com/rtpages/20140419-Tips-for-Keeping-Your-Electric-Bills-Low-This-Summer.htm

Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ……. click LIKE to receive real estate info and what’s happening in Marshfield. 

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Seven Great Reasons to Move

RealtyTimes.com,. April 18th, 2014
Maybe you’ve been there so long you’ve lost sight of how cluttered and unwelcoming and old and ugly it is. Or the sheer volume of stuff that needs to be done is so overwhelming you just ignore it altogether. Pack it up. It’s time to move on. Really.
Full Story: http://realtytimes.com/rtpages/20140418-Seven-Great-Reasons-To-Move.htm

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Woe to the Buyer: Lender Add-Ons and Costs to Acquire a Loan in 2014

RealtyTimes.com, April 20th, 2014
Just as housing is starting an upward rise in terms of pricing; lenders are implementing fees and add-ons making home mortgage loans more expensive to obtain than ever before.
Full Story: http://realtytimes.com/rtpages/woe-to-the-buyer-lender-add-ons-and-costs-to-acquire-a-loan-in-2014.htm

Follow Len and Leslie Marma of Success! Real Estate on their facebook business page, “Marshfield Matters” ….. click LIKE to receive real estate info and what’s happening in Marshfield.

 

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A Snapshot of Homeowners

Posted: 18 Apr 2014 KCM Crew

A Snapshot of Homebuyers

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Decline in Mortgage Rates Helps Spring Buying Season

Decline in Mortgage Rates Helps Spring Buying Season

In a bit of good news for homebuyers before the prime spring season, mortgage rates fell back a bit this week, according to reports from Freddie Mac and Bankrate.com.

In its weekly Primary Mortgage Market Survey, Freddie Mac reported the 30-year fixed-rate mortgage (FRM) averaging a rate of 4.34 percent (0.7 point) for the week ending April 10, a decline from 4.41 percent last week. A year ago at this time, the 30-year fixed was down nearly a full percentage point: 3.43 percent.

The 15-year FRM this week averaged 3.38 percent (0.6 point), down nearly a tenth of a percentage point from early April.

Average adjustable rates also came down. According to Freddie Mac, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.09 percent (0.5 point) this week, down a few basis points, while the 1-year ARM dropped to 2.41 percent (0.5 point).

“Mortgage rates eased a bit following the decline in 10-year Treasury yields,” said Frank Nothaft, VP and chief economist for Freddie Mac. “Also, the economy added 192,000 jobs in March, which was below the market consensus forecast but followed an upward revision of 22,000 jobs in February. Meanwhile, the unemployment rate held steady at 6.7 percent.”

Bankrate’s weekly national survey showed similar rate changes: The finance site recorded the 30-year fixed average at 4.47 percent, with the 15-year fixed averaging 3.52 percent. Meanwhile, the 5/1 ARM was unchanged at 3.34 percent.

Analysts for the site also pointed to investor turmoil as the cause behind the week’s movements: “Any time there is stock market volatility and investors get nervous, that tends to be good news for mortgage rates. As investors gravitate to bonds of various types, including those backed by mortgages, it helps bring the rates that are quoted to mortgage borrowers lower.”

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