Santa Fe Las Campanas Homes For Sale-Housing Steady to Start 2016

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 Over the past week, mortgage rates have drifted up and down mostly based on year-end volatility due to light trading volume. The economic events have had little influence. Mortgage rates ended the past week slightly higher.

While existing home sales dropped sharply in November, partly due to new closing disclosure regulations, other recently released data on housing activity showed better results. NAR’s pending home sales index for November was nearly unchanged. This index measures contracts to buy previously owned homes which were signed during the month. Similarly, the Commerce Board’s new home sales report measures contracts signed to buy new homes, and it showed a 4% increase in activity in November. These two leading indicators bode well for early 2016 closing activity. Fannie Mae forecasts a 3.9% increase in total home sales in 2016.

The core PCE price index is the Fed’s preferred indicator of inflation. The most recent release showed that in November inflation remained well contained, at an annual rate of just 1.3%. Both low commodity prices and a stronger dollar have helped keep inflation low in 2015. However, the effect these have on inflation is transitory. Unless commodity prices continue to fall or the value of the dollar continues to rise, future readings will not reflect these benefits. Since mortgage rates are heavily influenced by expectations for future inflation, the success of the Fed’s efforts to keep inflation low will be closely watched by investors in 2016.

Looking ahead, mortgage markets will close early on Thursday and will be closed on Friday in observance of New Year’s. Next week, the important monthly Employment Report will be released on January 8. As usual, this data on the number of jobs, the unemployment rate and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index and Construction Spending will be released on January 4. The ADP Employment Change, the ISM national services index and the Minutes from the December 16 Fed meeting will come out on January 6.
Robert Miera
Senior Loan Officer
Castle & Cooke Mortgage, LLC
505-800-6033 Ext. 412