Existing Home Sales Disappoints Housing Market But GDP Beats Expectations

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Peoples Home Equity comments on recent existing home sales and GDP

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Existing home sales, declined 4.29% from 5.12 million in October to 4.90 million for November.

Peoples Home Equity was disappointed to see a larger than expected decline in existing home sales yesterday. At the same time the lender was pleased with a strong increase in quarterly GDP, as released by the U.S. Bureau of Economic Analysis today.

Existing home sales, declined 4.29% from 5.12 million in October to 4.90 million for November. The housing news piled onto a disappointing week for lenders such as Peoples Home Equity. Apart from the third consecutive decline in monthly existing home sales, weekly initial jobless claims increased, and weekly mortgage applications dropped to annual lows. Mortgage rates have responded to this news by declining across the board. According to Mortgage News Daily’s rate survey, 30-year, 15-year, Jumbo 30-year, and 5/1-year ARM home loans all experience a small rate decline today. Peoples Home Equity sees the current decline for real estate as an opportunity to apply for a home loan at a lower mortgage rate.

Peoples Home Equity was surprised to see the quarterly GDP growth rate leap from 2.5% in the 2nd quarter to 4.1% in the 3rd quarter. GDP beat the market consensus by 0.5%, expectations were 3.6%. The 4.1% increase is the 2nd highest announcement in over 6 years! Given that the average quarterly GDP growth rate has been roughly 2.3% for the past 13 years, a reading of 4.1% was very impressive.

Peoples Home Equity does not expect to see another quarter of such dramatic growth some quite some time; however, it does expect the economy to continue improving. The Federal Reserve certainly agrees, as it expects unemployment to carry on its decline in unemployment. Subsequently, the Fed announced on Wednesday that it would cut its successful asset repurchase program from $85 billion a month to just $75 billion.

Despite a recent drop in real estate demand, mortgage rates will rise again and initial jobless claims will resume their downtrend and existing home sales rise. Now is the time to at least apply for a mortgage before obtaining a home loan becomes too expensive!

Please contact Peoples Home Equity loan officer today for HARP loan details at: (855)-897-0300

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Ornis Mala
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