Chicago, IL (PRWEB) February 21, 2014
Peoples Home Equity wishes everyone a happy weekend as Friday’s existing home sales announcement finished off the week dismally. Existing home sales fell to a level not seen since July 2012.
To recap the discouraging data from housing this week; on Tuesday, February18th, the NAHB housing market index posted a figure -25.1% below analyst expectations, on Wednesday, the market saw a monthly in decline in both building permits and housing starts, in addition, weekly mortgage applications declined to the lowest level in 6 weeks. To finish things off was existing home sales.
Existing home sales fell -5.13% from 4.87 million in December to 4.62 million in January, as shown on TradingEconomics.com. Existing home sales remains -34% below their 2005 highs of above 7.0 million units. Peoples Home Equity thinks the market may have reached the point where more first time home buyers need to get involved to boost sales. This relies on more young people getting jobs. Currently, the youth unemployment rate in the United States is above 10%. More of the young will need to get jobs to join the opportune lending category of first time home buyers.
At this point Peoples Home Equity is not sure sales can go much lower since Spring is around the corner which should reignite demand. The lender is of the opinion that when prospective home buyers see mortgage rates continue to increase despite tight housing inventories those individuals will have no choice but to buy in the moment. Mortgage rates can’t really go lower again with the Federal Reserve tapering its quantitative easing program and unemployment declining. Home prices can’t really go down when demand for housing out weights supply. Note, while housing inventories have increased from 4.6 million in December to 4.9 million in January, the market roughly needs 6 million units for demand to be equilibrium with supply. Peoples Home Equity is not pushing the idea to buy a home now, but it strongly suggest to apply for a competitive fixed rate mortgage now to hedge higher interest rates in the future.
Please contact Peoples Home Equity loan officer today for mortgage details at: (855)-897-0300