Guest Post – Tradition Mortgage’s Weekly Update June 1, 2015
Sales of newly constructed homes rebounded in April, up from the dip in March, as the spring buying season got underway. New Home Sales rose by 6.8 percent to an annual rate of 517,000, which was above the 510,000 expected. Since April 2014, sales are up a whopping 26 percent! The median price for a newly constructed home in April was $297,300, up 8.3 percent from a year ago.
Also of note, April Pending Home Sales increased 3.4 percent from March, while the S&P/Case-Shiller Home Price Index rose by 5 percent on an annual basis in March.
The news was less positive when it came the economy overall. The second reading of first quarter Gross Domestic Product came in at -0.7 percent, worse than the original reading of 0.2 percent. GDP is the broadest measure of U.S. economic strength, and is measured by the total value of all goods and services produced in a calendar year. In 2014, GDP grew by 2.4 percent, a decent number. The Federal Reserve expects GDP to grow by 2.5 percent for 2015, but the first quarter’s figures are not helping to meet this goal.
One benefit from the poor GDP reading is that it gave Mortgage Bonds a boost. This also helped home loan rates, which are tied to Mortgage Bonds, and which recently hit 2015 highs. With uncertainty continuing in Greece as it struggles to make a series of large debt payments, Mortgage Bonds and home loan rates could possibly see a benefit from safe haven trading in the coming weeks.
While market volatility is likely to continue, home loan rates still remain near historic lows and now is a great time to consider a home purchase or refinance.
NMLS # 761955
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489
Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com