Thoughts to Ponder . . .
- All of us have moments in our lives that test our courage. Taking children into a house with a white carpet is one of them.
- Officer: I had a feeling I’d catch someone speeding here. Driver: I know, that’s why I came as fast as I could!
- Laughter is like a windshield wiper, it doesn’t stop the rain but allows us to keep going.
And Now on to The Market Update . . .
An interesting statistic has shown up for 2016 that has caught many real estate and mortgage experts by surprise.
- According to the real estate website Trulia, the number of transactions failing to close after going into contract has risen sharply in many areas of the country.
Trulia’s analysis has determined that property listings that moved from for-sale to pending sale, returned back to for-sale again in 2016.
- This is almost twice as many that occurred versus 2015.
- This is not focused in any particular region of the country.
- 96 of the nation’s 100 largest metro areas showed this trending increase.
- This issue is occurring in high and low priced markets, large and small markets, and affluent and poorer neighborhoods.
For instance, in Ventura California, 11.6 percent of prospective sales failed to close.
- This was the highest in the country.
- This represents an increase of 3.1 percent from 2015.
- Tucson Arizona was second with 10.8 percent that failed, which is 3.5 percent higher than 2015.
- For perspective, the median home price in Ventura is $548,000, whereas Tucson median price is $176,000.
2017 appears to be starting out stronger for mortgage applications and home purchases.
- Now that Trump euphoria has seemed to ease, the stock market has been stable and mortgage rates have eased off their recent highs.
- According to the Mortgage Bankers Association of America, applications for purchases and refinances increased 6.0 percent and 4.0 percent respectively for the first week of the year.
The employment sector continues to remain strong.
- Although last Friday’s employment report for new hiring came in at 156,000, which was below analyst’s expectations, buried within the report was the strength in wage growth.
- The Fed is continuing to watch what is happening with job hiring, however the increase of hourly earnings by 0.4 percent has now caught the attention of the Fed.
- Rapid wage growth can lead to inflation.
- Although the Fed wants inflation to increase, they are continuing to remain cautious in that any increase needs to be controlled.
Following last week’s labor department report was the first time jobless claims data released on Thursday.
- Claims continue to remain very low at 247,000.
- Continuing claims continued to improve with a decline of 29,000.
Finally, the Job Opening and Labor Turnover Survey (JOLTS) continues to show a significant gap between available job openings versus hiring.
- It appears that employers continue to struggle to fill open positions as the number of new hires is far below the number of available positions.
This week’s many potential market moving reports are:
- Monday January 16th – Martin Luther King Holiday – All Markets Closed
- Wednesday January 18th – MBA Applications, Consumer Price Index, House Price Index, Consumer Price Index, and Industrial Production
- Thursday January 19th – First Time Jobless Claims and Housing Starts