Falling Consumer Confidence Helps Drag Mortgage Rates Lower. For Now.
July 29, 2010 by John Abry · Leave a Comment
For the second consecutive month, U.S. consumer confidence is plunging. July’s official reading is its lowest since July of last year and the figures run in stark contrast to just two months ago, when the index touched a multi-year high.
According to The Conference Board, July’s figures are reflective of a more pessimistic consumer; one concerned about “business conditions and the labor market”.
Falling confidence numbers are presumed to be poor for the economy. For homeowner and home buyers in Colchester , however, they can create opportunity. Low confidence can influence the mortgage market in a positive manner, driving mortgage rates down.
Mortgage rates are already at their lowest levels of all-time.
The link between consumer confidence and everyday mortgage rates roots in consumer spending.
Consumer spending accounts for close to 70% of the overall U.S. economy so, the thought goes that, a less confident consumer is less likely to spend money, thereby retarding economic growth. This harms the stock markets and drives cash to bonds, including mortgage-backed bonds.
More bond demand leads bond prices to rise which, in turn, pushes mortgage rates lower.
The other side of lagging confidence is that Americans may be less likely to take new financial risks when they’re feeling unsure, including buying a new home. This can then drag on the housing market, negatively impacting home prices across Vermont.
Falling home values can help buyers, harm sellers, and stymie would-be refinancers.
It’s tough to predict how consumer confidence data will work its way through the economy, but in the near-term, it appears to be helping mortgage rates stay low. If you’re floating a mortgage rate with your lender, or contemplating a refinance, the time may be right to lock in a rate.
Low rates can’t last forever.
Colchester Vermont Market Snapshot
July 28, 2010 by John Abry · Leave a Comment
What’s going on with Colchester real estate?
Following are real estate statistics for Colchester Vermont as of 07.28.10:
Single Family Homes for sale: 99
Average List Price: $475,112
Currently Under Deposit: 8
Sold Year to Date: 48
Average Sale Price: $309,662
Average Days on Market: 94
Last weeks Single Family Home sales:
40 Orchard Circle $386,000
34 Elderberry Lane $639,000
Condos for sale: 19
Average List Price: $264,032
Currently Under Deposit: 3
Sold Year to Date: 26
Average Sale Price: $209,113
Average Days on Market: 54
Last weeks Condo sales: n/a
The numbers above can vary widely depending on several factors including but not limited to location, style, condition and circumstances.
Call or email us for statistics specific to your neighborhood, town or city. Search Colchester Homes for sale.
Case-Shiller Shows Home Price Improvement In 95% Of Cities
July 28, 2010 by John Abry · Leave a Comment
Standard & Poors released its Case-Shiller Index Tuesday. On a seasonally-adjusted basis, between April and May 2010, home prices rose in 19 of Case-Shiller’s 20 tracked markets. It’s the second straight month of strong Case-Shiller findings.
Also, May’s numbers are a mirror-image of February’s. In February, 19 of 20 markets lost value.
In its press release, the Case-Shiller staff resisted calling May’s data proof of a housing recovery, noting that home values remain flat as compared to October of last year. However, there are some noteworthy numbers in the Case-Shiller report.
- 13 of the 20 tracked cities are showing home price improvement year-over-year
- Foreclosure posterchlld San Diego has now shown 13 straight months of improvement
- San Diego, San Francisco and Minneapolis are showing double-digit annual growth
These are all good signs for the housing market, but the Case-Shiller Index is not without its flaws. Most notably, the data is limited to just 20 cities nationwide — and they’re not even the 20 largest ones.
Cities like Houston, Philadelphia, and San Jose are excluded from Case-Shiller, while cities like Tampa (#54) are not.
Another Case-Shiller flaw is that it reports on a 2-month delay.
Therefore, today is several days from the start of August but we’re now reflecting on data from May. Given the speed at which the Colchester real estate market can change, May’s data is almost ancient. Today’s values may be higher or lower than what Case-Shiller reports.
For home buyers, reports like the Case-Shiller Index may not be useful in making a “Buy or Not Buy” decision, but can aid in watching longer-term trends in housing. For real-time data, talk to a real estate agent with access to local figures instead.
New Homes Sales Gain in June, But Gains Are Relative
July 27, 2010 by John Abry · Leave a Comment
After a down month in May, the sales of newly-built homes appears back on track.
As published by the Census Bureau, June’s New Home Sales report showed:
- A 24 percent sales volume increase from the month prior
- A 2-month drop in the supply of newly-built home
There are now just 210,000 new homes for sale nationwide.
June’s data is a major improvement over May, but it’s possible that the true “new home market” may be softer than the statistics suggest. This is for several reasons.
First, we’re comparing June’s sales data to the worst month in New Home Sales history.
In May, sales of new homes totaled just 267,000 units nationwide. That’s one-quarter fewer sales than in the previous worst month in New Home Sales history. May’s sales levels were awful by any measure but June’s improvement to 330,000 units remains second-worst sales levels ever posted.
Second, although much improved, June’s new home supply of 7.6 months is elevated versus the historical norm near 6.0 months. The last year has averaged 7.7 months.
For buyers of new homes in Colchester , this combination of low sales volume and higher-than-normal inventory may be a positive. It’s the main reason why homebuilder confidence is reeling and the downturn has opened some doors for big discounts and deals. Free upgrades and closing cost credits can make a well-priced home even more attractive.
Plus, with mortgage rates at all-time lows and expected to rise, home affordability is may never be better.
Tuesday Tours
July 26, 2010 by John Abry · Leave a Comment
Come join us on Tuesdays for coffee and a tour of the newest homes for sale In Colchester Vermont!
Each week we will leave from the RE/MAX North Professionals Colchester office at 2:00 PM* and visit the latest listings in Colchester. Along the way you will also have the opportunity to learn about Colchester history, Lake Champlain, neighborhoods, parks, shopping, places of worship, lake access, marinas, fishing… and maybe even some good town gossip!
Please contact us if you would like to reserve a seat as space is limited. We look forward to having you join us on our Tuesday Tours.
This week (07.27.10)* Tuesday Tours will include:
*subject to change
