Home > Uncategorized > Excellent Housing Affordability, but for How Long?

Excellent Housing Affordability, but for How Long?

Pending home sales were up 10.4% in October

The association’s pending-home-sales index rose to 89.3 in October from 80.9 in September. The 10.4% gain is the largest on record, with the data going back to 2001.

Sounds good so far, but…

“The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market” will help, said Lawrence Yun, NAR’s chief economist, in a statement.

The number of U.S. workers filing new applications for unemployment benefits rose 26,000 in the holiday-shortened Thanksgiving week to 436,000, bouncing off a more than two-year low, according to Labor Department data.

Seems like something else influences house hunters decision to purchase a home – if I could just remember. Oh yeah, mortgage interest rates.  

Rates on fixed-rate mortgages rose for the third week in a row, following bond yields higher after economic data suggested that the economy might be stronger this quarter, Freddie Mac’s chief economist said Thursday.

 

The rate on the 30-year fixed-rate mortgage averaged 4.46% for the week ending Dec. 2, up from 4.4% last week, according to Freddie Mac’s weekly survey of conforming mortgage rates. The mortgage averaged 4.71% a year ago. 

I don't believe the puff that mortgage rates are climbing because of a "strong" economy. My view is that this is the market's big raspberry to the FED and Helicopter Ben Bernanke's QE2 – also known as currency debasement. It's funny that no matter what Moe, Curly and Larry, er – Bernanke, Geithner and Obama try to do to manipulate the market, the market does what it wants. The Dollar is higher, but I thought the FED wanted to debase it. Interest rates and bond yields are higher, but I thought the idea was to keep them from rising.

So, pending home sales had a nice bump in October. However, the wizards at NAR are counting on an "improving job market" to ensure a continued "recovery" in real estate. Oh, and I guess they didn't mention mortgage interest rates because all the newly employed house hunters will have so much money they won't even be worried about it.

Gee I feel better knowing that housing and our "pending" recovery are in such "competent" hands.
 
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