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Americans purchasing fewer new homes

Posted by Mehran Aram on Thu, Jun 27, 2019 @ 05:06 AM

The rate at which homebuyers in the U.S. are purchasing new homes is currently at its lowest pace in over six months according to new data. Purchases of newly built single-family homes fell by 7.8 percent in May to a seasonally adjusted annual rate of 626,000, acording to the U.S. Department of Commerce. This is below economists’ expectations in a survey conducted by The Wall Street Journal who forecasted new home sales to be closer to 683,000.

As they sit on the market unsold, the supply of newly built homes on the market is increasing. New home inventory was approximately 6.4 months as of May, up from 5.6 months last year.

Sales of newly built homes have flatlined for most of the past year as builders failed to focus on entry level priced homes and instead flooded the market with larger, more expensive dwellings.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: homebuyers, single family homes, new home sales, U.S. Department of Commerce, Mortgage rates

Home building on the rise

Posted by Mehran Aram on Sun, May 19, 2019 @ 07:05 AM

Single-family home construction increased in the U.S. in April, driving housing starts up. Overall housing starts climbed 5.7 percent over the last month according to data from the Department of Commerce. The volume of construction permits also increased, a signal that housing starts in the coming months will be positive as well.

Low unemployment, a strong economy and lower mortgage rates have produced robust buyer-demand for housing, but rising material costs and labor shortages have hindered growth over the past year. These latest numbers suggest that home builders are not being deterred by these less than favorable conditions.

Experts predict that should demand continue to remain high, housing starts in particular may show resilience even if the housing market experiences a broader slowdown.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Home Builders, single family homes, Housing Starts, U.S. Department of Commerce, Mortgage rates, Home Building, Low Unemployment, Construction Permits, Home Construction, Strong Economy, Department of Commerce

Construction spending climbs in February

Posted by Mehran Aram on Wed, Apr 3, 2019 @ 05:04 AM

Following January’s surprising surge of 2.5 percent, U.S. construction spending rose yet again in February, this time by a more modest one percent. According to data released by the U.S. Department of Commerce, total construction spending in February was $1.32 trillion, the highest level since May 2018.

Driving the increases over the past few months was a spike in residential construction spending. The boost in new home building shows an attempt to meet anticipated demand as the spring-home buying season kicks off with falling mortgage rates.

Mortgage rates have dropped nearly a full percentage point since last fall. Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Construction, U.S. Department of Commerce, Mortgage rates, Home Building, Construction Spending, U.S. Construction

Dirt lots being sold before homes are built

Posted by Mehran Aram on Thu, Mar 28, 2019 @ 06:03 AM

The volume of homes being sold before they have even been built is increasing exponentially according to a new report. Data from the Commerce Department showed that more than 34 percent of newly built homes sold in 2018 was either before or while the property was under construction.

This comes as welcome news to homebuilders as it indicates a continued strong demand for new homes. Builders were challenged last year with flat sales and rising material costs causing big builder stocks to lose 20 percent on average.

Demand for new housing is expected to move higher as mortgage rates remain low. Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home sales, Housing Market, new homes, U.S. Department of Commerce, Mortgage rates

New home sales rise to 7-month high

Posted by Mehran Aram on Thu, Mar 7, 2019 @ 06:03 AM

Sales of new U.S. single-family homes rose in December, ending out a year that saw a slump in overall sales. According to the Commerce Department, new-home sales increased 3.7 percent in December on a month-over-month basis to a seasonally adjusted annual rate of 621,000 – the highest rate since May 2018. Economists surveyed by The Wall Street Journal had expected a decline to 605,000. Despite the surprising increase in December, new-home sales were down 2.4 percent in 2018 compared to the prior year.

Newly built home sales account for about 11.2 percent of the housing market’s overall sales. This latest report was released with a five-week lag, delayed by the partial government shutdown that ended January 25.

Although home price growth has slowed and mortgage rates have settled at 12-month lows, economists predict that a shortage of land and labor could weaken new-home sales for the coming months.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, new home sales, U.S. Department of Commerce, Mortgage rates

Sharp decline in construction spending ends 2018

Posted by Mehran Aram on Wed, Mar 6, 2019 @ 07:03 AM

After being delayed for several weeks because of the partial government shutdown, the Commerce Department on Monday released figures for construction spending for the month of December. Construction spending fell an unexpected 0.6 percent in the tail end of 2018. This is in contrast to a 0.2 percent increase forecast by economists in a polled conducted by Reuters.

Spending dropped in both the private and public sectors. Investment in private residential project shrank 1.4 percent in December after having risen 3.4 percent in November. Builders are blaming more expensive material costs and a shortage of both labor and land for the declines.

Still, construction spending for December was 1.6 percent higher on a year-over-year basis. It rose 4.1 percent overall in 2018, however this rate of increase is the slowest recorded since 2011.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: U.S. Department of Commerce, Mortgage rates, Construction Spending

Housing starts tumble in December

Posted by Mehran Aram on Fri, Mar 1, 2019 @ 05:03 AM

Housing starts ended 2018 on a sour note dropping to their lowest level in more than two years, according to the U.S. Department of Commerce. Total housing starts dropped 11.2 percent in December from the prior month bringing the seasonally adjusted annual rate to 1.078 million.

Low unemployment and a strong economy have historically been recipes for robust buyer-demand for housing, rising material costs and labor shortages are hindering growth. Housing starts were dragged down by a 6.7 percent decline in single-family home construction and a 20.4 percent drop in multifamily dwellings.

Applications for construction permits, an indication of future housing starts also declined in December. Stagnation in residential construction may reverse gains made in housing inventory over the last few months.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Starts, U.S. Department of Commerce, Mortgage rates

New home sales climb higher

Posted by Mehran Aram on Sun, Feb 3, 2019 @ 05:02 AM

Sales of newly built homes, which had been sluggish for much of 2018, reversed course in November, rising a whopping 16.9 percent from the month prior. According to the U.S. Department of Commerce, new home sales climbed to an annual rate of 657,000. This beats the prediction of 571,000 made by economist in a survey conducted by The Wall Street Journal.

November’s increase was not enough to push new home sales into the black for the year where they remain 7.7 percent lower. Builders focusing primarily on the higher end of the market with larger, more expensive homes, is partly to blame for the annual decline.

November’s home sales report was released just last week after being delayed by the partial government shutdown.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: home sales, new home sales, U.S. Department of Commerce, Mortgage rates, November New Home Sales

ARAMCO Report - Monday June 1, 2015

Posted by The Aramco Group on Mon, Jun 1, 2015 @ 16:06 PM

Weaker Economic Data Supportive of Low Interest Rates

Recent weak reports—about the GDP contracting and consumer sentiment going down—support a low interest rate environment. 

The negative reports from the U.S. Commerce Department and the University of Michigan Consumer Sentiment Index contributed to a mild flight to safety rally on Friday May 29, 2015 that drove down 10-year T-Bill yields and mortgage rates.

The most impactful contributing report was the Commerce Department’s revised quarter-one GDP figures that showed the economy contracted 0.7 percent. While this is less than the 1.0 percent revision economist expected, it may nonetheless spoil hopes that the country would have grown an average of 3.0 percent over the last 12 months.

The University of Michigan’s announced on the same day that its Consumer Sentiment Index also fell to May reading of 90.7, from 95.9 in April. This is a six-month low for the index.

Housing data is a silver lining however as the unfavorable economic data supports the Fed’s continued patience in not yet raising short-term interest rates, which promotes buyer demand.

People looking to buy a home will find mortgage rates near all-time lows with conforming no point 30-year fixed rates averaging 3.75 percent and 15-year rates averaging 3.00 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Topics: Interest Rates, U.S. economy, GDP, 30 year fixed rates, interest, economic data, U.S. Department of Commerce, University of Michigan

ARAMCO Report - Monday March 2, 2015

Posted by The Aramco Group on Tue, Mar 3, 2015 @ 09:03 AM

A generally improving U.S. economy once again pushed stock prices higher on Monday, sparking a selloff in bonds, which put upward pressure on mortgage rates. Conforming no point 30 year fixed mortgage rates still average 3 7/8ths with 15 year rates closer to 3 1/8th. Meanwhile the U.S. Department of Commerce reported construction spending for January of 2015, which came in 1.1% below December’s levels, but 1.8% above January of 2014. And now for something completely different… Did you know that according to gaming laws, casinos have to stock a certain minimum amount of cash? How much cash? Enough to cover all the chips on the casino floor!

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

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Topics: 30 year fixed rates, Construction, U.S. Department of Commerce, Mortgage rates, stock prices, Casinos