Modest rise for pending home sales
Pending home sales for July were largely unchanged but there was a modest rise of 0.5 per cent; the seventh straight month of gains. The National Association of Realtors says that its pending sales index is now 7.5 per cent higher than a year ago but that limited inventory at affordable prices is holding back some buyers.
Lawrence Yun, chief economist of NAR, says that the volatile stock markets can bring mixed fortunes for confidence in the housing market as some buyers will be cautious while others will see property as a stable option: "Overall, the prospects for ongoing strength in the housing market remain intact for now. The U.S. economy is growing — albeit at a modest pace — and the labor market continues to add jobs."
Mortgage rates lower due to stock markets
The current global fluctuations on the stock markets have helped push mortgage rates lower for the week to Aug. 27 according to the Freddie Mac Primary Mortgage Survey. The rate for 30 year FRMs was down to 3.84 per cent from 3.93 per cent a week earlier; 15-year FRMs averaged 3.06 per cent, down from 3.15 per cent; 5-year ARMs averaged 2.90 per cent, down from 2.94 per cent; 1-year ARMs were unchanged at 2.62 per cent. Sean Becketti, chief economist of Freddie Mac, says that if stock market conditions remain bumpy the Fed may delay interest rate increases: “If that's the case, the 30-year mortgage rate may remain subdued in the short-to-medium term, providing support for continued strength in the housing sector.”
Google billionaire’s house search may have produced a result
Sergey Brin, co-founder of Google and boss of Alphabet, may be about to move into a $49 million New Jersey home. The New York Post says that the entrepreneur with a net worth of around $39 billion has been checking out a 42-room home at 18 Frick Drive, Alpine. With 12 bathrooms and a whopping 19 bathrooms, the 30,000 square foot mansion comes with a 4,000 square foot wine cellar, indoor basketball court, pool and fitness center.
Sacramento home building slowed by workforce shortage
Home builders in Sacramento want to complete their developments, which would certainly aid inventory levels, but can’t find enough construction workers. The Sacramento Bee reports that some homes that have been started are now sitting idle due to a lack of drivers, painters, drywall crews and other trades. The problem stems from the financial crisis when lay-offs in the construction industry saw many workers leave the industry and they haven’t all come back. The issue isn’t just one for Sacramento but nationally builders are struggling to find enough labor at a time when demand for housing is surging.