Interest Rates and Improving Household Balance Sheets Outer Banks Homes For Sale
Household balance sheets continue to improve. Net worth is growing steadily, albeit at a much more moderate rate than 2013-2014. Meanwhile, household leverage remains at healthy levels.
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WASHINGTON (AP) — U.S. home prices scaled new heights in April, with seven cities — Boston, Charlotte, Dallas, Denver, San Francisco, Seattle and Portland, Oregon — setting highs.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.4 percent in April compared with a year earlier, just below the 5.5 percent year-over-year gain posted in March.
Home values are now just 9.6 percent below their peak set nearly a decade ago, according to the report released Tuesday.
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New home sales jumped 16.6 percent in April to an annual rate of 619,000 homes. April’s sizable gain pushed sales 23.8 percent above their year-ago level. The previous three months of data were also revised higher.
Corelogic predicts that home prices will appreciate by 5.3% across the country this upcoming year. This is the 49th consecutive month with year over year price gains. Corolla, NC, Outer Banks home sales and construction is up and pending homes sales have reached a new yearly high.
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Home prices rose in November, as the S&P/Case-Shiller U.S. National Home Price Index (HPI) increased
0.9 percent on the month. Nationally, home prices have risen 5.3 percent over the past year.
Western Cities Lead the Way
Supply & Demand Driving Prices
U.S. stocks closed sharply lower Wednesday, pressured by low oil prices, as concerns about global economic slowdown weighed ahead of major earnings reports.
The S&P 500 closed down 2.5 percent, ending below the psychologically key 1,900 level for the first time since Sept. 29. The index fell below that level in intraday trade for the first time since Oct. 2, 2015. Consumer discretionary was the greatest declining sector.
All three U.S. averages closed more than 10 percent below their 52-week intraday highs, in correction territory.
“It started with crude just weakening a little bit. Everyone’s so afraid of this earnings season they’re pre-selling it,” said JJ Kinahan, chief strategist at TD Ameritrade.
He noted selling accelerated as the S&P 500 gave up gains for the day and turned lower in late-morning trade. The VIX also climbed, holding near 25 in the close.
Chatter about stress in the hedge fund community contributed to the selling pressure while traders also noted a certain flight to safety.
Treasury yields fell, with the 10-year yield hitting its lowest since late October and the 2-year yield touching its lowest since mid-December.
All eyes are on the Fed today as Janet Yellen is expected to announce the first raise in interest rates since 2006. The housing market has been slowly recovering from its March 2012 bottom (according to the Case-Shiller Index), but it’s been largely aided by near-zero interest rates. Thirty-year fixed-rate mortgages remain below 4%, down from 6% in 2008.
So is the still-fragile housing market in for a shock today? It’s a mixed bag says, Barbara Corcoran, investor on ABC’s “Shark Tank” and founder of The Corcoran Group, a large real estate company based in New York. “The immediate reaction will be the same as it always is when interest rates are raised: It creates a psychological deadline for anyone who’s thinking about buying and sitting on the fence,” she says. “They get right off the fence and think it’s their last chance to get in there, so you’ll definitely see an uptick in sales nationwide.”
Unfortunately the uptick in home sales will be short-lived, says Corcoran. If rates continue to rise at a rapid clip, sales will eventually taper off. Fannie Mae chief economist Doug Duncan believes that markets have already priced in the Fed’s move and the rate hike will have no immediate impact on Treasury or mortgage rates. But while some of the Fed’s impact has been priced in, this week has been a volatile one for the market, and volatility tends to be serially autocorrelated.
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By Lucia Mutikani
WASHINGTON (Reuters)
U.S. job growth increased solidly in November in a show of the economy’s resilience, which most likely paves the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade. Nonfarm payrolls increased 211,000 last month, the Labor Department said on Friday. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.
Nonfarm payrolls rose 211,000 last month, the U.S. Labor Department said on Friday. September and October data was revised to show 35,000 more jobs than previously reported.
The unemployment rate held at a 7-1/2-year low of 5.0 percent, as people returned to the labor force in a sign of confidence in the jobs market. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.
“The employment report should remove the final doubts about a rate hike at the December meeting. The clear message from the labor market to the Fed is: ‘Just do it!'” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria the U.S. central bank has set for the Fed’s first rate hike since June 2006.
Yellen said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working age population.
A Reuters survey of banks that deal directly with the Fed showed all but one of the so-called primary dealers expect the Fed will hike rates at the Dec. 15-16 meeting. They see only a gradual pace of monetary policy tightening through 2016.
The U.S. dollar firmed against the euro after European Central Bank President Mario Draghi said in New York that the ECB could deploy more stimulus if needed. U.S. Treasury debt yields initially rose, but later fell after OPEC failed to agree an oil production ceiling. U.S. stocks ended higher.
BROAD GAINS
The second month of strong job gains should allay fears the economy has hit a soft patch, after reports showing tepid consumer spending in October and a slowdown in services industry growth in November. Manufacturing contracted in November for the first time in three years, according to one business survey.
A strong U.S. dollar and spending cuts by energy companies have been headwinds to the economy. A separate report from the U.S. Commerce Department on Friday showed the international trade deficit widened in October as exports hit a three-year low.
Though wage increases slowed last month, economists say that was mostly payback for October’s outsized gains, which were driven by a calendar quirk. Anecdotal evidence, as well as data on labor-related costs, suggest that tightening job market conditions are starting to put upward pressure on wages. Outer Banks New Homes for Sale Corolla, NC
Builder Optimism Continues to Improve
Steady Regional Gains
