No interest rate increase for a year says Fannie
Fannie Mae does not expect the Fed to increase interest rates until June 2017. In its outlook for the second half of 2016 the corporation says growth will be 2 per cent, unchanged from its previous outlook. However, it warns that there is a “shadow” cast by post-Brexit uncertainty.
On the housing market, Fannie’s chief economist Doug Duncan believes there should be some moderate expansion for the rest of this year despite some mixed data. Also, the post-Brexit shadow should hold mortgage rates lower for some time.
“While new home sales have pulled back from their expansion-best, existing home sales rose to the highest level in more than nine years amid the largest year-over-year drop in for-sale inventory since October of 2015,” said Duncan. “Without relief from new construction, housing inventory will likely remain tight, boosting home prices and constraining affordability.”
Housing starts up almost 5 per cent
New home construction increased in June with new starts up 4.8 per cent according to data from the HUD and Commerce Dept. Overall there were 1.5 per cent more permits issued to reach a seasonally adjusted annual rate of 1.15 million.
Multifamily units saw the largest growth in starts at 5.4 per cent with single-family home starts gaining 4.5 per cent. Permits were up 1 per cent for single-family homes and 2.5 per cent for multifamily units.
“The June report is consistent with our forecast for a gradual but consistent recovery of the housing market,” said NAHB Chief Economist Robert Dietz. “Single-family production should continue to strengthen throughout the year, buoyed by job growth, new household formations and low mortgage interest rates.”
Permit issuance gained in the Northeast (9.4 per cent) and South (8.3 per cent) but declined in the Midwest (2.8 per cent) and West (10.1 per cent).
Horror fan buys “Silence of the Lambs” house
The home of fictional serial killer “Buffalo Bill” has sold in Layton Pennsylvania, after being listed almost a year ago. The 5-bedroom, 1.5 bathroom home was used in some of the most haunting scenes from “Silence of the Lambs” and has struggled to attract a buyer since being listed in August 2015.
The New York Post reports that it was originally listed at $300,000 and then discounted to $250,000 but even then buyers were reluctant. The new owner, a fan of the movie who did not want to be named, snapped up the 8 Circle Street home for $195,000.