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Housing Market Update:
Confidence among U.S. homebuilders was little changed in April, indicating the housing market lacked momentum as the spring selling season got under way.
One way to look at housing market condition is from the builder sentiment gauge. It is held at 58 this month, where it has been since February, figure readings greater than 50 mean good market conditions.
Better buyer traffic and growing optimism about the outlook for the next six months made up for a drop in current housing market sales of single-family homes, underscoring that demand is lackluster even as hiring strengthens and borrowing costs remain low. Faster growth in wages and a higher supply of homes within the reach of more Americans would go far in ushering a stronger rebound in residential real estate.
The single-family housing market sector continues to recover at a slow but consistent pace. As we enter the spring home buying season, we should see the market move forward.
The median forecast is 59; estimates ranged from 57 to 60. The prior month’s reading was unrevised. The index reached a 10-year high of 65 in October.
Prospective buyer traffic climbed to 44 from 43 the prior month, while the index of current sales of single-family home decreased to 63 from 65.
The measure of the six-month sales outlook improved to 62 from 61.
Builder confidence fell in the Northeast and Midwest and was little changed in the South and West.
Builders remain cautiously optimistic about construction growth in 2016. Solid job creation and low mortgage interest rates will sustain continued gains in the single-family housing market in the months ahead.
The job market is underpinning consumer purchases of homes and automobiles. The March employment report showed employers added 215,000 workers to payrolls after a 245,000 February advance. The jobless rate, which edged up to 5 percent as more people entered the labor force, is hovering near an eight-year low. At the same time, worker pay is yet to accelerate.
Borrowing costs remain historically low. The average rate for a 30-year fixed mortgage was 3.58% last week, the lowest since May 2013 and down from 6.63% in July of 2008, according to data from Freddie Mac.
Federal Reserve policy makers, who lifted interest rates in December for the first time since 2006, have signaled further moves will be only gradual.
A Commerce Department report due Tuesday may show a mixed picture on residential construction activity. Housing starts probably cooled in March while permits, a sign of future construction, climbed for the first time in four months.
Contact our home loan agent at Golden Pacific Home Loans San Ramon to get pre-approved for your home mortgage this season.