Last week, more good news came regarding home prices. A leading data aggregator reported national home prices were UP 9.7% in January versus a year ago, the biggest annual increase since April 2006. And the 0.7% monthly advance they posted was their 11th in a row. Many observers feel these price gains will likely boost home sales during the first half of the year. Lake Geneva and area is part of the Milwaukee Metro system and our stats show that days on the market has fallen to 5.7 months and inventory continues to go down.
In addition, asking prices of homes listed for sale on a major online real estate portal were up compared to a year ago in 90 of the top 100 U.S. metros. The asking price gains for February were the largest since the recession began, UP 1.4% for the month and UP 7% versus a year ago. Their chief economist commented, “…buyers face a dilemma between buying now before prices rise even more, or later this year, when they’ll have more inventory to chose from.” If you have been waiting to jump back into the market you may be watching it go by! Many buyers have been use to ‘having time’ but that is not the case right now as properties go under contract. Second home buyers for the Geneva Lakes Resort communities are purchasing now to be in for summer.
SETTING RECORDS… Starting Tuesday, the Dow set new record highs four days in a row, blasting past the peak it reached in 2007, well before the recession. Even the broadly based S&P 500 index ended the week just 14 points away from its all-time record high. What made investors feel so optimistic were some decent corporate earnings, better economic data, and the growing recognition that the government spending cuts known as the sequester probably wouldn’t have that much of an economic impact once they started to kick in.
ISM Services bested expectations, at 56.0, showing solid expansion in the sector where over 80% of our jobs are found. Those jobs are now being created at a healthier pace, with 236,000 nonfarm payrolls added during February, enough to push the unemployment rate down to 7.7%, its lowest level in four years. The release of the Fed’s Beige Book of economic observations from around the country concluded that the U.S. economy is now expanding at a “modest to moderate pace.”
The week ended with the Dow up 2.2%, to 14397; the S&P 500 up 2.2%, to 1551; and the Nasdaq up 2.4%, to 3244.
The upbeat economic data that sent stocks skyward slammed bonds pretty hard. The FNMA 3.5% bond we watch ended the week down .94, at $104.31. Freddie Mac’s Primary Mortgage Market Survey had average fixed mortgage rates mostly holding steady from the week prior. Their chief economist feels, “…these low mortgage rates are helping to revive the housing market.” Underlining that point, mortgage applications were up 14.8% over the week before, according to the Mortgage Bankers Association.
