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Will Home Values Begin To Rise In 2012?
Will your North Georgia Mountain Home gain value over the next 12 months? Nobody can know for sure of course, but should recent housing trends continue, there’s concrete cause for optimism.
The housing economy has suffered since 2007, knocking home values down nearly 20% nationwide and an average of almost 35% here in the North Georgia Mountain Real Estate Market. And while some areas have fared better as compared to others but, in general, home values are down.
Mortgage rates are down, too, and that’s good news for buyers in Blairsville and Blue Ridge, GA. The combination of low rates and low prices has led home affordability to an all-time high. As you’ll hear in this 4-minute interview with NBC’s The Today Show, carrying a mortgage costs 25% less per month as compared to just 3 years ago.
Some other notes from the interview include :
- There are more buyers out looking for homes today, which leads to more sales
- The housing market is expected to get gradually better, month-by-month, in 2012
- Foreclosures will continue to be a big part of the housing market
With housing supplies shrinking, buyers throughout North Georgia may find their best “deals” today — before the Spring Buying Season begins in February.
However, we can’t forget that housing markets are local — not national. Each town and neighborhood has its own market drivers and prices where you live may have already started to climb.
For accurate, up-to-date data on the housing market, Contact Us or give us a call today at 877.633.8186.
What Does Job Growth Returning To “Normal” Levels Do To Mortgage Rates?
Be prepared for Friday morning. Mortgage rates and home affordability could worsen quickly. At 8:30 AM ET, the Bureau of Labor Statistics releases its April Non-Farm Payrolls report and momentum has been strong.
The monthly jobs report is a market-mover and analysts expect that 196,000 new jobs were added last month. If those expectations are exceeded — by even a little — Wall Street would take it mean “economic strength” and the stock market would be boosted.
Too bad for rate shoppers, though; a move like that would also lead to higher mortgage rates throughout North Georgia. This is because, coming out of a recession, reports of economic strength tend to push mortgage rates up. We’ve seen it happen multiple times in the last 8 months.
Since losing more than 7 million jobs between 2008 and 2009, employers have added 1.3 million jobs back to the economy. And we’re learning that there’s plans for fewer job cuts in the future. It’s clear that the jobs market is improving and this is why tomorrow’s Non-Farm Payrolls report is so important.
A “weak economy” helped keep mortgage rates low for a very long time. A strengthening economy will reverse that tide.
So, consider your personal risk tolerance today, in advance of tomorrow’s Non-Farm Payrolls report. If the thought of rising mortgage rates makes you nervous, call your loan officer and lock in a rate today. Once tomorrow’s data is released, after all, the market might look changed.
Related articles
- Geopolitics Have Mortgage Rates Poised To Change (thefrontporchview.com)
Home Builders Slowed By Economy
Home Builder confidence held firm for the second straight month this month, according to the National Association of Home Builders.
The monthly Housing Market Index registered 16 out of a possible 100. January’s reading is three points higher than the 2010 low-point, set in September, and in-line with last year’s average reading.
According to the NAHB, the market for newly-built, single family homes remains relatively weak “following a below-expectations finish in 2010″. Builders expect a better 2011.
The Housing Market Index dates to 1985. It’s a composite of surveys which gauge the builders’ perceptions of the new home-buying market.
There are 3 surveys and they ask:
- How would you rate market conditions for sales of new homes today?
- How would you rate market conditions for sales of new homes 6 months from now?
- How would you rate the foot traffic of prospective buyers of new homes?
The answers are then collated and weighted, and used to produce the Housing Market Index.
In January, market conditions for current and future sales were deemed to be flat. Foot traffic is seen as increasing. For Home Buyers of New Homes in Blairsville , this data may foretell of more bidding wars in the months ahead.
More active buyers means more competition for homes. It may also mean fewer concessions from builders as confidence starts rising.
If you’re in the market for a newly-built home, watching the Housing Market Index may be sensible. Each builder is different, of course, but as the overall market sentiment falls, buyers can be more likely to get “a deal”. That’s not the case once confidence is rising.
The HMI is plateaued. If it resumes rising later this year, expect new homes to get more costly.
Could Poor Jobs Data Hint At Lower Mortgage Rates?
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report from the month prior. This month, though, because the first Friday of the month was also the first day of the month, the report was delayed one week.
The report hit the wires at 8:30 AM ET this morning.
More commonly called “the jobs report”, the government’s non-farm payrolls data influences stock and bond markets, and, in the process, swings a big stick with home affordability figures in Blue Ridge, GA. and nationwide.
Especially in today’s economic climate.
Although the recession has been deemed over, Wall Street remains unconvinced. Data fails to show the economy moving strongly in one direction or the other and, absent job creation, economists believe growth to be illusionary.
Consider:
- With job creation comes more income, and more spending.
- With more spending comes growth in business
- With growth in business comes more job creation
And the cycle continues.
The prevailing thought is that, without jobs, consumer spending can’t sustain and consumer spending accounts for two-thirds of the economy. No job growth, no economy recovery.
But there’s another angle to the jobs report, too; one that connects to the housing market. As the jobs market recovers, today’s renters are more likely to become tomorrow’s homeowners, and today’s homeowners are more likely to “move-up” to bigger homes. This means more competition for homes at all price points and, therefore, higher home values.
And that brings us to today’s jobs data.
According to the government, 95,000 jobs were lost in September. Economists expected a net loss of 5,000. However, if public sector jobs are excluded from the final figures, jobs grew by 64,000. This is a positive for the private-sector, but still trailed expectations.
Wall Street is voting with its dollars right now and mortgage bonds are gaining, improving mortgage pricing.
So, although the September 2010 jobs report doesn’t reflect well on the economy overall, home affordability in the North Georgia Mountains and around the country should improve as a result.
A Simple Explanation Of The Federal Reserve Statement From September Meeting
Today, in its 7th meeting of the year, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.
The Fed Funds Rate remains at a historical low, within a Fed’s target range of 0.000-0.250 percent.
In its press release, the FOMC said that the pace of economic recovery “has slowed” in recent months. Household spending is increasing but remains restrained by high levels of unemployment, falling home values, and restrictive credit.
For the second straight month, the Federal Reserve showed less economic optimism as compared to the prior year’s worth of FOMC statements dating back to June 2009. However, the Fed still expects growth to be “modest in the near-term”.
This outlook is consistent with recent research showing that the recession is over, and that growth has resumed — albeit at a slower pace than what was originally expected.
The Fed also highlighted strengths in the economy:
- Growth is ongoing on a national level
- Inflation levels remain exceedingly low
- Business spending is rising
As expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period”.
There were no surprises in the Fed’s statement so, as a result, the mortgage market’s reaction to the release has been neutral. Mortgage rates in Georgia are thus far unchanged this afternoon.
The FOMC’s next meeting is a 2-day affair scheduled for November 2-3, 2010.
Home Sales Down But Higher Than A Year Ago
Mortgage Rates Spike After The Federal Reserve's Meeting
Mortgage markets reeled Wednesday after the Federal Reserve released the minutes from its January 26-27, 2010 meeting. Mortgage rates in Georgia are now at their highest levels since the start of the year.
The Fed Minutes is a follow-up document, delivered 3 weeks after an official FOMC meeting. It’s a companion piece to the post-meeting press release, detailing the debates and discussions that shaped our central bankers’ policy decisions.
The Minutes is a terrific look into the Fed’s collective mind and, yesterday, Wall Street didn’t like what it saw. Specifically, the report disclosed that:
- The Fed plans to break support for mortgage markets after March 31, 2010
- Raising the Fed Funds Rate will be a key part of the Fed’s strategy to tighten monetary policy
- The fundamentals behind consumer spending strengthened modestly
Furthermore, the Fed Minutes said that there is a growing risk of “higher medium-term inflation”. Inflation, of course, is awful for mortgage rates.
Overall, the Fed’s economic optimism appeared stronger after its January meeting as compared to its December one. A stronger economy should lead to better job growth and higher home prices throughout 2010.
Mortgage rates were up yesterday but they remain historically low. And many analysts think that after March 31, 2010, rates will rise even more. Therefore, if you’re buying a home in the near-term, or know you’ll need a new mortgage, consider moving up your time frame.
Every 1/8 percent makes a difference in your household budget.
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Rate-Locking Strategy Ahead Of The Fed's Meeting Today
The Federal Open Market Committee ends a scheduled, 2-day meeting today in Washington. It’s the first of 8 scheduled meetings for the policy-setting group in 2010.
The group adjourns at 2:15 PM ET.
As is customary, upon adjournment, the Fed will issue a press release to the markets recapping its views of the country’s current economic condition, and the outlook for the near-term future.
The post-meeting statements from the Fed are brief but comprehensive. And Wall Street eats them up. Every word, sentence and phrase is carefully dissected in the hope of gaining an investment edge over other active traders.
It’s for this reason that mortgage rates tend to be jittery on days the FOMC adjourns. Wall Street is frantically re-balancing its bets.
Today should be no different.
The FOMC is expected to leave the Fed Funds Rate within its target range of 0.000-0.250 percent — the lowest it’s been in history. However, it’s what the Fed says Wednesday that will matter more than what it does.
After the Fed’s last meeting in December, it made several observations:
- The jobs market is getting “less worse”
- The housing sector is making improvements
- Financial markets are stabilizing further
The economy is gradually improving, the Fed told us, but there are still risks to the economy ahead. Furthermore, inflation remains in check.
As compared to December’s press release, today’s FOMC statement will be closely watched. If the Fed changes its verbiage in any way that alludes to strong growth and/or inflation in 2010, expect mortgage rates in Ellijay to rise as Wall Street moves its money from bonds to stocks.
Conversely, reference to slower growth in 2010 should lead rates lower.
We can’t know what the Fed will say so if you’re floating a mortgage rate right now or wondering whether the time is right to lock, the safe approach would be to lock prior to 2:15 PM ET Wednesday. After that, what happens to rates is anyone’s guess.
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Could Bad Job Reports Cause The Mortgage Rates To Fall?
Despite the headlines, it’s important to remember that December’s jobs report wasn’t all bad news.
Sure, the economy shed 85,000 jobs last month and the Unemployment Rate failed to dip below 10%, but for home buyers and rate shoppers in the North Georgia Mountains , the news was just fine.
The soft employment data led mortgage rates lower, making homes more affordable for buyers.
There is two sides to every economic coin.
Since early-2008, the U.S workforce has been closely tied to home financing. As the economy slowed and jobs were lost, Wall Streeters pulled money from the risky stock markets and moved it to of the relative safety of bond markets, instead.
Safe haven buying led mortgage bond prices higher which, in turn, caused rates to fall. Mortgage rates fell to 6 all-time lows in 2009. In a related statistic, 4.2 million jobs were lost last year.
And this is why Friday’s non-farm payrolls report was so good for buyers.
See, in November, the economy added new jobs for the first time since 2007, housing looked strong, consumer confidence was growing. The safe haven buying reversed and mortgage rates took off. Analysts believed the nation’s economic turnaround was complete.
But now, after December’s jobs report returned to the red, Wall Street is forced to rethink its position. Safe haven buying is back and mortgage rates are lower because of it.
Over the next few months, expect a lot of this back-and-forth action in rates. In general, positive news for the economy will be met with higher mortgage rates and negative economic news will be met with lower mortgage rates. There will be exceptions, but the general rule should hold.
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Hurry And Buy A House Before Someone Else Gets A Job!
As Unemployment Rates Fall, Mortgage Rates Rise
This morning’s jobs report is causing mortgage rates to rise, capping a week during which rates have already jumped 3/8 percent off all-time lows.
The government’s November Non-Farm Payrolls report reinforced the notion that the recession is nearly over, if not over already.
Just 11,000 jobs were lost last month — much fewer than analysts had expected — as the Unemployment Rate fell to 10.0%.
If it seems strange to be talking economic recovery while Americans are still losing jobs – 7.2 million since 2008 – remember that data always needs context.
See, analysts view employment figures as a lagging indicator for the economy. This is because business owners tend to make hiring decisions based on how business has been – not on how it will be at some point in the future.
The jobs report rarely reflects the “right now”. As an example, job loss peaked in January 2009 – 4 months after the height of the financial crisis.
We saw the same pattern during the Recession of 2001.
According to government data, during the last recession, job loss peaked in October 2001 but the recession ended the very next month. It wasn’t until October 2002 that employment went net positive on a monthly basis.
And this is why investors are cheering November’s jobs report. Better-than-expected numbers and a falling Unemployment Rate show that the economy is improving.
Unfortunately for rate shoppers, better-than-expected data is pushing mortgage rates higher. Rates are expected to open 0.250% higher versus yesterday’s close.
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