Various Positive Market Tidbits

by Tim McLaughlin, Senior Vice President, Weichert Financial

The Monthly National Housing Survey for December was released by the Economic and Strategic Research (ESR) team on January 7th with some notable moves in certain results

• At 43%, the share who believes home prices will go up in the next 12 months reached the highest level recorded, up 6 percentage points over November.
• 21% of respondents say it is a good time to sell, a 10 percentage point increase year over year

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The CoreLogic Home Price Index (HPI) showed that home prices nationwide, including distressed sales, increased on a year over year basis by 7.4% in November 2012 compared to November 2011.

This change represents the biggest increase since May 2006 and the ninth consecutive increase in home prices nationally on a year over year basis. On a month over month basis, including distressed sales, home prices increased by 0.3% in November 2012 compared to October 2012.
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The jobs report for December showed that the labor market closed 2012 on a note of resilience. Nonfarm payrolls rose by 155,000, in line with the 3 and 6 month averages of 151,000 and 160,000, respectively. For all of 2012, the US economy created 1.86M new jobs. Gains in December were notable in the goods producing sector, with manufacturing jobs up at a 9 month high of 25,000, while construction jobs jumped by 30,000, following a decline of 10,000 recorded in November in the wake of Hurricane Sandy. Revisions showed a net increase of 14,000 in the prior two months.
The household survey showed the unemployment rate unchanged at 7.8%. November’s rate was revised up by 0.1% due to annual revisions in seasonal factors. The details of the household report were mixed as employment in this survey showed a gain of just 28,000, while the labor force rose by 192,000, reversing the sharp decline seen in November.

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Secondary Market Takeways:  What we have seen over the first few weeks of 2013 is stronger than expected corporate earnings, a slew of positive economic data releases, and growing confidence in the US markets and the economy in general that perhaps this economic uptick we are feeling is real and sustainable post fiscal cliff concerns. While this is positive for most of the market sectors (i.e. – Equities, Corporate Bonds), the negative recipient of the positive news has been the Treasury sector and the Mortgage Backed Securities market, as rates have ticked up a tad in the first half of the month.
However, with debt ceiling concerns coupled with a Fed pledge to continue buying bonds for most/all of 2013, we will see if the range trade continues.
Regardless, with 30 year Fixed rates in the mid 3% range and 15 years in the high 2’s, still an excellent time to obtain financing for the pre-spring market or for that refinance that is just begging you to save hundreds of dollars monthly. Need help analyzing the value…we can help….ask us how!