Financing Homes in Lake Tahoe and Truckee since 1992.

Bumps, Declines and Surprises-Commentary ~ July 19, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates: 

If we define market conditions as the extent to which investors seem to be complaining, then the loud market conditions seem to have necessitated reassurances from the Fed that it wouldn’t allow rates to rise until the economy is clearly strong enough to stand on its own two feet. But there is more to market conditions than investor sentiment, and the credit markets have been on an unpredictable and volatile roller coaster, even as they settled down from the frightened spike of a few weeks ago. The decline in the rate for the 6-month T-bill and, especially, the 10-year note and the Freddie Mac average rate for the week suggests that the markets’ investors took the Fed at its word and expect both short-term and the longer-term rates to remain low well into the future.

 Indeed, one of the most outstanding bits of data released this past week—the latest results of the July survey of builder confidence—reinforces the view that the real estate market (if not the broader market) is repairing itself at a strong and steady rate. In fact, many analysts looked at the Housing Market Index’s 6-point jump and noted that this kind of upward move hasn’t been seen since the housing boom from roughly 2006 to 2008. Builders are reporting large increases in the number of potential buyers touring properties for sale, as well as in the volume of purchases underway. And this positive news is reinforced by a striking decline in the number of claims for unemployment insurance, suggesting probable gains in the confidence of consumers and possibly in employment figures as well.

 Before we uncork the champagne, however, it’s probably important to note that the number of new homes—single-family and multifamily—under construction in July fell by a steep 9.9%, having risen by 8.9% the prior month. Though the main culprit here was dramatically few multifamily home starts and permits, the numbers were bad enough that the financial press announced it (with predictable gloom) as a possible end to the housing surge. (’s headline declared, for example, “Unexpected Drop in Starts Curbs U.S. Housing Rebound.”)

 What we find this week, in any case, is a mix of good and a few not-so-good economic data releases and a plentiful serving of confusion. The proof will be in the monthly numbers, though, and we’ll be looking at Existing Home Sales and New Home Sales data next time. Stay tuned.