A weekly analysis of the economic data released during the past week, and how current economic conditions are affecting the real estate market.
Palm Coast, FL – March 7, 2011 – The National Association of Realtors® Research staff now gives you a weekly analysis of the economic data released during the past week, and how current economic conditions are affecting the real estate market. For daily economic forecasts, visit NAR Research’s Facebook page.
Every week the Research staff analyzes key data releases and explain what they mean for you and your business. In this update, we give the highlights of the most important data releases for the week of March 7-March 11, 2011 along with graphs that show the latest movement and overall trends. Read the full update after the jump.
Highlights for Monday, March 7, 2011
- The interest rate on the 30-year fixed mortgage rate has decreased by 23 bps over the last 3 weeks to 4.93%.
- The mortgage rate decreased despite a 17 bps increase in the ten year treasury rate since March 1st. The increase in the treasury rate reflected both higher growth prospects based on the latest employment data and indications by the European Central Bank that they were likely to raise interest rates to fight inflation in the Euro Area.
Highlights for Tuesday, March 8, 2011
- Non-revolving credit of U.S. consumers increased $9.3 billion in January, according to yesterday’s Federal Reserve report. This boost reflected strong demand for vehicles.
- On the other hand, revolving credit, i.e. credit cards, declined in January by $4.2 billion for the first time since August 2008. In total, seasonally adjusted consumer debt increased $5.0 billion, or a 2.5% annualized rate, in January to $2.412 trillion.
- The experts believe that consumer borrowing will increase more in the coming months as consumers become more confident about the economy and the jobs market.
Highlights for Wednesday, March 9, 2011
- Mortgage purchase applications rose 12.5 percent for the week ending March 4th, although they were down 14.3 percent from the same week a year ago. Purchase applications are a leading indicator of home sales.
- However, purchase applications do not always translate into loan acceptances and transactions. Also, purchase applications do not take into consideration cash buyers who according to the January REALTORS® Confidence Index make up as much as 32 percent of transactions. In Las Vegas and Miami, the cash purchases have said to approach 50 percent.
- Consumers took advantage of low mortgage rates, which rose slightly to 4.93 percent on a 30-year fixed mortgage. Refinances, which accounted for 65.5 percent of mortgage activity, fell 17.2 percent.
Highlights for Thursday, March 10, 2011
- The U.S. trade deficit rose from $40.3 billion to $46.3 billion in January according to the Department of Commerce. The expansion of the deficit was largely a result of increased imports of capital goods and industrial inputs and not petroleum, though.
- Jobless claims jumped 26,000 for the week of March 5th to 397,000. The sharp increase came on the heels of two strong, consecutive weekly declines and was likely the result of a correction in the wake of the 4-day holiday week just one week prior.
Highlights for Friday, March 11, 2011
- Retail sales including food services sales were up 1 percent in February 2011 from a month earlier and 8.9 percent from the year before. Spending grew substantially over the year at car dealers (25.9 percent), gas stations (12.9 percent), and building material & garden equipment & supplies dealers (10.9 percent). Furniture & home furnishings stores, electronics & appliance stores, and department stores saw a small decrease in sales from February 2010. Sales are based on dollar volume and show that the upward trend in gas prices has caused some shifting of consumer spending to gas from other goods.
- The preliminary release of Consumer Sentiment for March shows a drop in consumer assessment of the current situation and outlook, likely due to rising gas prices and the expectation that they will not retreat soon. The reading of 68.2 is in line with the reading in September 2010 though in September expectations were higher than in the March preliminary reading.