Mortgage Outlook
Economic Update
U.S. Economy
Americans’ anxiety about the economy and their jobs resurfaced in July, sending a widely followed measure of consumer confidence downward and ending three consecutive months of increases. The Conference Board reported its Consumer Confidence Index fell to 103.2 from a revised 106.2 in June, lower than the 106.2 analysts expected. Lynn Franco, director of the private research group’s Consumer Research Center, said the dip was “no cause for concern.” Franco noted, “The overall state of the economy remains healthy and consumers’ outlook suggests no storm clouds on the short-term horizon. Even the steady upward tick of fuel prices at the pump has done relatively little to dampen consumers’ spirits. Yet, while there is little to suggest a downturn in activity, there is also little to suggest a pickup.” Consumers’ sentiment contrasted with an upbeat assessment of the economy last week from Federal Reserve Chairman Alan Greenspan, who said he expected the economy to keep growing even as a flurry of job cuts from major corporations were announced. Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity. One component of the Conference Board report, which looks at consumers’ views of the current economic situation, fell to 118.5 from 120.8. Another component, the Expectations Index, which measures consumers’ outlook over the next six months, declined to 93.0 percent from 96.4 in June.
Real Estate Watch
Sales of previously owned U.S. houses hit a record pace in June, climbing 2.7 percent as home prices soared 14.7 percent from a year ago, the biggest jump in nearly 25 years. Sales of existing homes surged to a seasonally adjusted 7.33 million unit annual rate last month from May’s upwardly revised 7.14 million unit clip, the National Association of Realtors said. The total includes both single-family homes and condominiums. Industry analysts had expected overall sales to increase to a 7.15 million unit annual pace. Total existing home sales, single-family sales and condo sales, as well as the national median home price, all hit record levels, the Realtors’ data showed. Existing home sales also hit an all-time record pace for the second quarter of the year. The national median home price rose to $219,000, up from $191,000 a year ago and the strongest increase since November 1980, when annual appreciation was 15.6 percent, the group said. Single-family home sales climbed 2.4 percent to a record 6.37 million unit annual rate from May’s 6.22 million unit rate. Condo sales hit a fourth consecutive record, up 4.5 percent to a 960,000 unit rate from a 919,000 unit pace in May. While many economists had forecast some slowing in home sales and price appreciation this year, many have bumped their estimates higher and see 2005 as a record year.
Sources: Associated Press, Reuters
Home Banc Rates
30 Yr Fixed Conforming – 5.875%
15 Yr Fixed Conforming – 5.50%
30 Yr Fixed FHA/VA – 6.25%
5/1 Conforming ARM– 6.00%
Jumbo – CM Series
30 Yr Fixed – 6.375%
5 Yr LIBOR ARM –
5.75%
30 Yr Fixed My Community Solutions – 6.25%
Contact:
Donald Ster
904.470.2062
dster@homebanc.com
