Improving confidence in job security and the U.S. economy will help drive continuing success in the real estate market.
Chicago, IL (PRWEB) July 26, 2015
The Federal Savings Bank thinks there may be more first-time home buyers interested in purchasing a new home now. Freddie Mac's weekly Primary Mortgage Market Survey indicated the average interest rate for a home loan ticked down for the week ending July 23.
Lower rates for fixed-rate mortgages
The survey indicated the average interest rate on a 30-year FRM dropped slightly below the rate seen on a week-over-week basis. In addition, it still remains lower when compared to the previous year.
The typical 15-year FRM decreased week-over-week as well as year-over-year.
"U.S. Treasury yields dropped following announcements that many blue chip companies' earnings failed to meet expectations. This drove the 30-year fixed rate mortgage down," said Sean Becketti, Freddie Mac's chief economist. "Housing continues to be the bright spot in the economic recovery. Existing home sales beat market expectations coming in at a seasonally adjusted annual rate of 5.49 million homes. This is up 9.6 percent from a year ago and the fastest pace since 2007. Also, housing starts jumped 9.8 percent responding to strong demand in the multifamily market."
An improving housing market bodes well for those looking to invest in a new home in the near future.
Adjustable-rate mortgage rates increase slightly
While FRMs decreased, the average 5-year Treasury-indexed hybrid ARM inched up from the previous week. In addition, the average 1-year Treasury-indexed ARM increased a bit on a week-over-week basis.
Fewer unemployment insurance claims suggest stronger economy
With low rates, individuals who are confident in their job security and personal financial situation may decide to purchase a home soon. According to a news release from the Labor Department on July 23, the number of unemployment insurance weekly claims for the week ending July 18 dropped to its lowest level since November 24, 1973. The number of initial claims fell to 225,000, which is down 26,000 from the previous week.
The Wall Street Journal reported on July 23rd that strong hiring numbers and low layoff numbers likely are key contributors to the news.
Improving confidence in job security and the U.S. economy will help drive continuing success in the real estate market. It will be especially helpful as young adults decide to start families and invest in a home to fit their evolving needs. The increase in home sales may be an indicator of this already starting.
Contact the Federal Savings Bank, a veteran owned bank, to learn more about mortgages.