Frank Yan of Sacramento on Information That Hits Us Where We Live

Frank Yan of Sacramento post a Sacramento Real Estate Market Update

There seem to be no barriers in sight to the housing market recovery. Friday saw Housing Starts up 5.9% in July, hitting an 896,000 unit annual rate. Those looking for signs of impeded progress were quick to point out that all the gain was due to multi-family starts, which rebounded after their steep drop in June, while single-family starts slipped 2.2% for the month. But the underlying home building trends remain upward. Single-family starts are up 15.4% over a year ago and the total number of homes under construction is up 30% versus a year ago.

Experts say the upward trend in home building should continue for at least a couple of years. They believe population growth and tear downs will require starts to ultimately rise to about 1.5 million units per year, most likely by 2015.This level of building puts the number of homes increasing at the same rate as the population. Building Permits headed up 2.7% in July, with permits for single-unit homes up 17.9% over a year ago.The National Association of Home Builders reported their Builders Confidence Index at its highest level since November 2005.

This Week’s Forecast

LEADING INDICATORS AND EXISTINGHOMES UP, NEW HOMES DOWN, AND THE FED SAID WHAT? Thursday expect to see the Leading Economic Indicators (LEI) index up for July following an upbeatExisting Home Salesreport on Wednesday. Unfortunately, the week will end with New Home Sales for July forecast at a slightly lower annual rate.

TheFOMC Minutesfrom the last Fed meeting will be scrutinized as usual to see if the central bank will start tapering its bond buying program in September. This could send mortgage bond prices down and edge mortgage rates up.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Frank Yan states that the material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice or a commitment to lend