The big freeze that gripped the housing markets in February thawed out a bit in March as construction on new homes edged higher, but were below expectations. The Commerce Department reported that Housing Starts rose 2% from February to March to an annual rate of 926,000, below the 1.045 million expected. The March rate of 926,000 is 2.5% below the year-earlier period and well below the average of 1.5 million over the 20 years leading up to the housing crisis.
Americans filing for first time unemployment benefits rose in the latest week to a six-week high, signaling a pickup in the pace of layoffs. However, numbers below 300,000 point to a relatively strong labor market. Weekly Initial Jobless Claims rose by 12,000 in the latest week to 296,000, above the 282,000 that was expected. The data does tend to be volatile this time of year given the Easter and school spring break holidays. The four week moving average of claims, which irons out seasonal abnormalities, was essentially unchanged, which was good news.
Home loan rates continue to hover just above all-time lows as the spring buying season revs up. The 30-year fixed home loan rate averaged 3.67% with an average 0.7 point in the week ending April 16, well below the 4.27% this time last year. However, despite the continued low interest rate environment, mortgage application activity has been relatively flat so far in 2015. Freddie Mac's survey asks lenders each week about the terms they offer low-risk borrowers on loans up to $417,000.
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