National 2012 Market Trends - A Lender Viewpoint.

Real Estate Agent with Joy Daniels Real Estate Group, Ltd.

Jessica Regan with GMH Mortgage in Camp Hill, PA (717) 798--3123 sends me periodic Market Recap's that she has allowed me to share with the Active Rain Group.   Since the AR community is Nationwide, I thought this National Recap would be interesting to you .  I would love to know your thoughts about your specic area. 

Obviously this Recap is from a lender viewpoin, but it is nice to see a gain reported for February.   I too believe that the American Dream is home ownership and I know that in the Central Pennsylvania area, buyers are starting to regain confidence in the ideal of home ownership.  The chart at the bottom shows good resale and new home sales for February. 

MARKET RECAP:  Are the home builders portending better days ahead? We think so, because their sentiment continues to reflect more optimism and improving new-home prospects.

For proof, the NAHB/Wells Fargo Home Builder Sentiment Index gained four points in February, pushing the index to a 29 reading – the highest reading in over four years. What's more, February was the second-consecutive month of a four-point gain and the fifth-consecutive month-over-month gain.

Even more encouraging to us is the fact that home builder optimism isn't confined to specific index components or specific areas. Gains are evenly split among current sales, future sales, and buyer traffic, and evenly distributed by metropolitan region.

The latest data further buttress the case for a rosier housing outlook. In fact, the Commerce Department data show housing starts increased 1.5% in January, pushing starts up to 699,000 annualized units, the highest start rate since October 2008.

Many housing pundits have pointed to multifamily starts as reason for the upturn. To be sure, multifamily starts are in an uptrend, having increased 14% to an annualized rate of 175,000 units in January. It's worth noting, though, that single-family starts posted at 508,000 annualized units in January. That's a 1 percent drop from December's starts, but December's single-family starts were revised up strongly to 513,000 homes – a 12-percent gain from November.

In short, the resurgence in home construction isn't being driven by renters alone. People still want to own a home, and they are still willing to buy a new one.

Whatever type of home someone wants, it can be financed at record low mortgage rates. In fact, a new low was set again this past week. For this, we can thank the Greeks. As improbable as it might seem, what occurs in Athens, Greece impacts mortgage rates in Athens, Georgia.

Modern financial markets are very interwoven. When investors become nervous about the debt situation in Greece, they pull their money out of Greek debt and put it in haven investments like U.S. Treasury securities. The securities (particularly the 10-year Treasury note), in turn, influence long-term mortgage rates: Treasury rates drop, mortgage rates invariable drop as well.

The Federal Reserve also influences mortgage rates by purchasing mortgage-backed securities. The Fed's purchases creates demand for these securities, thus driving mortgage rates down. The Fed has recently stated that it's willing to purchase more of these securities if needed. That means rates are unlikely to move significantly higher in the near future.

That said, they are unlikely to move significantly lower either, thanks to an improving economy. Therefore, we see no reason to wait to refinance or purchase a home for anyone so inclined. On the latter, the timing is unlikely to get better. According to the NAHB and Wells Fargo, buying a home today is more affordable than it has been any time in the past 20 years.

We've noted many times that low prices and high affordability don't last in perpetuity. Given the surge in home builder optimism and improved employment numbers, we don't expect homes to be as affordable at year's end as they are today.



Date and Time



Mortgage Applications

Wed., Feb. 22,
7:00 am , et


Important. Purchase activity has turned lower in recent weeks, but higher builder activity points to an upturn in purchase applications.

Existing Home Sales

Wed., Feb. 22,
10:00 am , et

4.6 Million Units (Annualized)

Important. Low mortgage rates and low home prices continue to stimulate sales.

FHFA Home Price Index

Thurs., Feb. 23,
10:00 am , et

0.1% (Decrease)

Important. The worst price declines are likely behind us, as reflected in prices oscillating upward.

Consumer Sentiment

Fri., Feb. 24,
9:55 am , et

73 Index

Moderately Important. Sentiment continues to improve with the improving job market.

New Home Sales

Fri., Feb. 24,
10:00 am , et

325,000 Units

Important. Recent advancements in home builder sentiment points to sustain sales gains.

Posted by


Joy Daniels, GRI, ABR, CSP, e-PRO
2793 Old Post Road, Suite 200
Harrisburg, PA  17110

(717) 695-3177  office - Call TODAY and let me help you find your dream home! - Email TODAY and let me help you find your dream home!

What is your home worth?  Find out at MLS Market Snapshot

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Scott Whitwam, APREP, ABR, SFR, ASD,CDPD ,Designated Broker Mesa AZ
Allison James Estates & Homes - Mesa, AZ


Good to hear from a lender. 14% is significant and I'm glad to hear that confidence is up

Feb 26, 2012 07:23 AM #1
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

Thanks Scott.  I enjoyed the report too.

Feb 26, 2012 09:48 AM #2
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Joy, it is nice to see the perspective of a local lender on how the market is doing.     Nice that you highlight Jessica's wisdom.

Feb 05, 2013 10:49 PM #3
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

Thanks for helping my post not be an orphan post Joan.  :)  I do value the opinions of experts in the real estate arena. 

Feb 06, 2013 05:12 AM #4
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