First, CNNMoney.com reported a sudden, unexpected surge in U.S. housing starts. According to the Commerce Department, housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January. The big surprise: Economists were expecting starts to decline to 450,000, according to consensus estimates by Briefing.com.
Furthermore, applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. The other big surprise: Economists were expecting permits to fall to 500,000.
Also interesting this week, retail sales figures fell much less than expected in February, and surprisingly strong January sales were revised even higher. According to CNNMoney.com, “U.S. store sales showed a smaller-than-expected decline in February after an unexpected surge in January that was bigger than originally reported…The Commerce Department said total retail sales fell 0.1% last month, compared with January’s revised increase of 1.8%. Economists surveyed by Briefing.com had been expecting a decrease of 0.5% for February.”
So, is it safe to call this a trend? Are we out of the woods yet? It’s tough to say. In all honesty, you don’t know whether or not you’ve hit bottom until you’re on your way back up but it seems some of the critical signs are starting to show signs of life which is welcome relief for our wounded economy.
Also in the news this week, the Federal Reserve announced plans to purchase up to $750 billion in mortgage-backed securities and up to $300 billion in longer term Treasury securities. Our representatives at the National Association of Realtors applauded the plans noting “This is great news for American home buyers and homeowners because mortgage interest rates will continue at historic lows.”
What this means for Americans is that a greater number of home buyers will be able to purchase a home and homeowners facing challenges will be able to refinance into better terms. As NAR noted, “We already are experiencing a great improvement in housing affordability due to historically low interest rates and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory.”
Along the lines of mortgage relief, the Treasury Department this week launched a new website for consumers seeking information about the Obama Administration’s Making Home Affordable loan modification and refinancing program. The site, www.MakingHomeAffordable.gov, offers features including interactive self-assessment tools that will empower borrowers to determine if they are eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program.
Silicon Valley—Our Coldwell Banker Cupertino De Anza office reports that activity seems to be picking up. Our Our Coldwell Banker Cupertino Stevens Creek concurs noting that we are getting great listings and are still helping buyers. The Our Coldwell Banker Los Altos office reports that the market is picking up and new listings are coming in and some are turning into sales. Our Our Coldwell Banker Los Gatos office reports that buyers continue to look for deals. Open houses are filled with lots of buyers. Many are still hesitant. There is not much movement in the high end. Our Our Coldwell Banker San Jose Almaden office reports that short sales are being approved but because of the time it takes to have them approved, buyers are backing out. Confidence is evident in investors who are paying cash for REOs with multiple offers. Higher price points remain slow while lower price points remain brisk. Blossom Valley has nearly 40% of its inventory pending while Almaden only has 15%. The San Jose Willow Glen office reports little change from last week. Open houses are quite busy and the floor calls are coming in, though they have slowed up a bit. Sellers are not getting what they want for their homes and the buyers are smart enough to know that they are in the driver’s seat.