Housing Looks Solid After First Time Home Buyer Tax Credit

Filed under Housing Starts by on April 20, 2010 at 7:48 am {no comments}

After a strong March showing and a surprise upward-revision for February, are, once again, trending better.

A Housing Start is a new home on which construction has started and, over the last 6 months, home builders are averaging one half-million starts per month.

This marks the highest 6-month average since 2008 and a reading one-fifth percent better from 12 months ago.  Revisions to prior data have all been higher, too.

Even more interesting, though, is that the number of newly-issued is exploding. Permits were up more than 5 percent last month and have climbed back to the levels of late-2008.

Housing permits are an important data point in housing because permits are precursors to actual housing starts.  According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.

Therefore, because March’s housing permits increased, we should expect Housing Starts to continue to rise into the early months of summer.

This, too, reflects well on housing because the federal home buyer tax credit won’t be in existence this summer. The simple fact the homes are being built now shows that housing is likely to expand even after the tax credit expires.

Non-military members must be under contract by April 30, 2010 and closed by June 30, 2010 in order to claim up to $8,000 in federal tax credits.

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FHA Interest Rate Predictions – Feb. 16, 2010 Edition

Filed under Weekly Review by on February 16, 2010 at 7:47 am {no comments}

FHA interest rates ticked higher last week, although they didn’t jump as much as they could have.   It was the first time in five weeks that rates ticked higher.

Mortgage bonds had rallied so much in the past few weeks that some natural profit-taking was to blame and the Greece issue appears to have some potential rescue efforts in the works.

This week’s predictions are back to basics:  domestic news.   The calendar is loaded starting on Wednesday.

We’ll see:

  1. and (Wednesday)
  2. The release of the last month’s (Wednesday)
  3. Business and figures (Thursday and Friday)

Housing starts could be soft as weather was brutal across the country last month.  Keep an eye on permits.  Weather delays a start, but builder optimism is what triggers the permit.

The FOMC Minutes are significantly more involved than the simple press release after the meeting.  Wall Street acts on what it thinks that the Fed is thinking.  That guessing game resumes when the minutes hit later this week.

Inflation could move on Thursday and Friday.  Bonds hate inflation and a hotter-than-expected reading could cause interest rates to jump.

If you know you are likely to need to lock an FHA mortgage this week, the odds favor locking before the landslide of data hits.  Rates have a little room to go lower and a lot of room to go higher.

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