03|04|2016

Home for Sale

Home-for-Sale-300x199

As I was leaving for work this morning I noticed yet another home in my neighborhood up for sale, the house across the street has a SOLD sign on it, and my next door neighbor is moving out on Sunday.  While this activity is a great sign for the housing recovery, it’s a pain in the butt making welcome brownies every 2 weeks for the new people moving in!

The housing recovery has been very modest through to last year.  Last year the markets turned a corner as we saw rock bottom mortgage rates, inventory dry up, home prices climb, and distressed properties become less and less the norm.  This year, while off to a slower start, it still has plenty of steam.  Here are some recent statistics[1]:

    • New home sales for May: 504K
    • Existing home sales for May: 4.89M
    • S&P CS Home Price Index composite 20 city, year over year May: 10.8%
    • 30 year fixed mortgage as of 6/20: 4.36%[2]

All of these statistics lend themselves to a housing market (and buyer) well on its way in the mending process.  Buyer activity has improved as rates have stayed low and price increases have started to moderate.  That being said, we still have a ways to go:

    • Residential housing typically represents 5% of GDP and is currently at 3%[3], leaving further expansion in this category.
    • Building Permits and housing starts are down 6.4% and 6.5% month over month respectively[4].

While the last statistic may be attributed to the overly robust May figures for sales, it is still something to watch as the summer progresses.

United States

There were many economic reports released last week that lend themselves to strengthening US economic conditions.  Some of which included improved manufacturing and industrial production data.  In addition, initial jobless claims and ongoing unemployment benefits fell, showing continued improvement in the US job market.

International

European inflation remained at 0.7% according to Core CPI for May[5].  There are a few emerging economies remain in contractionary range for their manufacturing indices; Brazil, Russia, South Africa, and China[6].  The conflict in Iraq has kept oil prices elevated.  Otherwise the global economy appears to be having a fairly strong second quarter.

For more information:

If you would like an in-depth analysis of your current positions and allocation, please feel free to call Jason Roque at 719-313-7536 to schedule an appointment.

Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services.  Broad diversification across several asset classes with a long term holding strategy is the best strategy in any market environment.  Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.



[1] www.investing.com

[2] www.jpmorganfunds.com

[3] http://www.nahb.org/generic.aspx?genericContentID=66226

[4] www.investing.com

[5] www.investing.com

[6] www.oppenheimerfunds.com