January 20th, 2012 11:25 AM by Michael Reen
The President is either receiving an early Christmas present for 2012, or maybe it is a late present from 2011, either way he has to be truly loving what is happening in the economy. As I have written before, the presidential campaigning is super dirty this year and is only going to get worse. What the President must be excited about is that there is no disputing the facts that the economy is improving. Whether you believe he is the reason for it or not, the President gets to ride the wave of good fortune. The question is will the wave last long enough for him to win re-election? (Only time will tell)
This week, almost every piece of economic data is showing signs of recovery. From housing, to manufacturing, to inflation, it has all been good news this week.
Mortgage rates continue to remain ridiculously low and last week both mortgage applications for purchases and refinances jumped a healthy 10.3% and 26.4% respectively. Many believe that the low rates and combined with the end of the holiday season, are the catalysts to moving buyers back into the market. Real estate and mortgage professionals around the country are reporting significant increases in borrower and buyer activity.
Activity in new home sales is picking up dramatically based on the Home Builders Housing Market Index. The month of December is showing the best reading in four and a half years and it is also the 4th straight month of improvement since the low of September.
Housing Starts dipped in December, which is not uncommon during the holiday season, however the overall pace remains somewhat healthy. In addition, what is quite encouraging is that permits for new construction continue to be heading in the upward direction.
Inflation on the wholesale and retail levels continues to remain virtually non-existent. We had some jumps last year which began raising concerns about rising inflation, however at this time the upward trend has stopped. Energy prices remain well under control and in fact have come down recently. The abnormally warm winter, especially in the Northeast, seems to be playing a part in the lower energy prices.
Industrial Production and Manufacturing are both increasing in a healthy fashion. Considering when you see this data improving, even during the end of the year and holidays, that is always a strong sign and one that is welcomed by many.
The employment picture, which is the biggest driver toward the economic recovery, reported the lowest week of First Time Jobless Claims since…well I can’t even remember. Claims last week dropped 50,000 all the way down to 352,000.
Finally, you know that little thing in Europe that has been playing havoc with the markets, (the Debt Crisis), even the daily panic about that seems to have subsided. By no means is the crisis over, however the markets do not seem to be making radical moves based upon every word uttered about it. In fact the stock market has been somewhat stable this week and it appears that many investors are sitting back with a wait and see attitude.
Next week’s economic reports are:
Wednesday January 25th – MBA Mortgage Report, Pending Home Sales & FOMC Announcement
Thursday January 26th - First Time Jobless Claims, New Home Sales & Durable Goods Orders
Friday January 27th – GDP and Consumer Sentiment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 408-626-1879.