All eyes on Big Ben for Friday; Home price index, pending home index rise
Posted August 29, 2012
All eyes are on Ben Bernanke this week as the Fed Chairman is preparing to deliver remarks from the Fed’s annual Economic Symposium in Jackson Hole, Wyoming on Friday. Many economists are hoping that his speech will shed some clarity on what movement the Fed will make as it relates to QE3. Market volatility and significant mortgage rate movement could be prevalent depending on what is said, and how the markets interpret his data.
The August Consumer Confidence Report took quite a dive on Tuesday, falling to a reading of 60.6 from 65.4 in July according to the latest report from The Conference Board. The reading is now at its lowest level in nine months, indicating that consumers are growing more concerned about the labor market and business conditions as we head into the fall. This data point is an important one in that if consumers get too concerned about the economy, they’ll pull back on spending, and overall GDP will slow. The silver lining there is that as economic conditions deteriorate, more validity is given to the mindset of monetary easing, which would allow conditions to be more favorable for Triangle housing in the form of potentially lower mortgage rates.
For the first time in two years, all 20 cities in the Case-Shiller Home Price Index showed an increase in prices. The June reading indicated that prices rose across the country by 0.5% in year over year data. This information continues to reinforce the notion that the fundamentals of housing are not only improving, but are doing so consistently in many areas across the nation.
Continuing with the positive trend, on Tuesday the National Association of Realtors said its Pending Home Sales Index rose 2.4% in July to its highest level in over two years. The index is a representation of future sales, and provides continued momentum for a slowly healing housing market.
Mortgage Rates are still trading in a very narrow, but favorable range.