September was a Positive Month For New Home Sales

This September was reported to be 15.5% higher year-over-year due to the lower mortgage rates. The National Association of Home Builders’ data shows that sales were 7.2% higher in the first nine months of 2019 than those reported in the first nine months of 2018. This first nine months this year

brought in 527,000 sales beating the 491,000 sales reported for the same time frame in 2018.

Signs show sales volume increasing with the more new homes that are reported being built. New home sales for the first nine months of 2019 were up 12.8% in the South, and 7.3% in the West compared to the first nine months of last year.

This fall is a great time to purchase a new home with the median new home sales price at $299,400. Right now, nearly 15% of newly built homes are priced under $200,000! This buyers' market will not last, so if you are in the market to purchase a home, buy your new home before the new year.

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Lowered Interest Rates Are Favorable For the Economy

Most Americans are affected by interest rates whether through a mortgage or credit cards. July 2019, marked the first time the Federal Reserve lowered interest rates since the crash in 2008. Pressured by President Trump and the possibility of an economic downturn, policymakers voted 8-2 for the small cut in federal rates.

“Should trade negotiations turn positive and economic data, especially inflation, firm in coming

months, July’s move could be a one-and-done easing,” said nationwide senior economist Ben Ayers in a note. “Still, given the slowing trajectory for the economy and precedence from previous mid-expansion easing cycles, a further rate cut (or two) by year-end may occur.”

Investors are eager to see the out turn of the rate cut and are hoping for more rate cuts in the near future. They are watching for any clues that there will be a future rate cut. Wall Street has already been pricing another rate cut for the year end.

The economy is strong as seen in job gains and retail and economic growth on the rise. If there is another cut, the Federal Reserve will need to justify their decision.

Policymakers vocalized that they will “continue to monitor” any data which would have an effect on the US economy and “act as appropriate” to retain “the country’s longest economic expansion in history.” The central bank believes these steps are necessary to keep America’s economy strong.


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Job Growth and Lower Mortgage Rates Boosting Single-Family Housing

This year the housing industry has been on an uphill victory. According to NAHB Chief Economist Robert Dietz newsletter, Eye on the Economy, there are two main factors that are helping the single-family housing sector.

Job growth has been on a positive path in 2019. It is reported that there is a historically low unemployment rate at 3.7%. In June 2019 there were 224,000 jobs added to the country’s workforce.

The first six month of the year saw an average of 172,000 new jobs per month.

In the residential construction industry alone the increase was 21,000 jobs in June. The average for the first six month of the year in residential construction stands at 5,800 per month. Since the recession, there have been a total of 923,800 positions added in residential construction.

Also to aid in the booming housing industry is lower mortgage rates. Freddie Mac reports that the averaging 30-year fixed-rate is 3.8%. This is the fifth straight month that mortgage rates have fallen making this one of the best times to finance a home.

A recent industry survey shows that the mortgage loan applications for both purchase and refinance surged in the first week of June 2019.

In the most recent survey put out by the Freddie Mac’s research team it states that this “will help sustain the momentum in the housing market in 2019.”

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