Peoples Home Equity expects the Housing Market Index to climb above 50 in the coming two months.
Chicago, IL (PRWEB) April 13, 2014
Peoples Home Equity reminds readers that next week will be filled with numerous economic announcements relating to the housing market. Next week, the NAHB will report its Housing Market Index, the U.S. Census Bureau will report Building Permits and Housing Starts, and the Mortgage Bankers Association will report weekly mortgage applications per usual.
Tuesday, April 15th
Tuesday starts off with the Housing Market Index released by the National Association of Home Builders. The index is based on a survey which asks home builders to rank “current single-family home sales and sales expectations for the next six months.” The survey has been conducted for 30 years and thus carries a lot of weighted importance for real estate investors/participants. Home builders are also asked “to rate the traffic of prospective buyers” on a relatively high or low scale. An index value is calculated from this rating system in a range of 0-100 in which 50 is a neutral condition of the market. The Housing Market Index value was at 47 for March signifying a slightly weak sales environment. Peoples Home Equity expects the Housing Market Index to climb above 50 in the coming two months.
Wednesday, April 16th
Wednesday starts off with the Mortgage Bankers Association (MBA) weekly mortgage application survey. The number of applications has been negative for the past three weeks, but the week over week declines have been minimal. Peoples Home Equity expects to see a surprise surge in applications very soon which could quickly more than offset this recent weakness. Next, the U.S. Census Bureau will release its numbers for March Building Permits and Housing Starts. This data is critical for gauging how much new real estate supply is being added to the market to catch up with the current overabundance of demand. Currently, housing inventories remain low which are causing home prices to remain high.
Despite relatively higher home prices now, Peoples Home Equity has been encouraging all prospective mortgage applicants to apply and get approved before mortgage rates move higher. The Federal Reserve is tapering its quantitative easing program which is causing mortgage rates to remain high just like how the shortage of housing inventory is holding up property prices.
Prospective mortgage applicants should also apply for a home loan now because if any of the data points show a surprise positive number next week, mortgage rates may react negatively for the home buyer. Mortgage rates tend to follow positive or negative economic conditions, positive housing reports this week will probably push rates higher.