Last week’s economic news included construction spending and the CoreLogic Home Price Index for January. Reports for February included ADP Employment, Non-Farm Payrolls and national unemployment data.
The Federal Reserve’s Beige Book report and weekly reports on mortgage rates and new unemployment claims rounded out the week’s economic news.
Highlights for last week include:
Consumer spending gained 0.40 percent for January. The expected reading was 0.20 percent and the reading for December was flat.
The Commerce Department reported that increased spending was less an indicator of consumer discretionary spending than an indicator of high utility costs caused by severe winter weather.
Construction spending ticked upward in January with gain of 0.10 percent as compared to expectations of -0.40 percent and the prior month’s reading of 0.10 percent.
January’s reading translates to a seasonally adjusted annual figure of $943.1 billion.
Federal Reserve: Winter Weather Obscures Accurate Economic Outlook
According to the Fed’s Beige Book report, much of the U.S. economy was impacted by severe winter weather. The report is based on anecdotal information provided by business contacts and industry leaders throughout the 12 regions of the U.S. Federal Reserve System.
Eight regions reported slow economic growth. Janet Yellen, chairwoman of the Fed, noted that winter weather was not expected to alter the Fed’s plan to continue reducing its asset purchases under its quantitative easing program. She also said that it may be months before accurate economic readings can be obtained in the aftermath of winter weather conditions.
Freddie Mac’s Primary Mortgage Market Survey brought good news on Thursday as mortgage rates fell across the board and discount points were also lower in most cases.
Average mortgage rates were down nine basis points for a 30-year fixed rate mortgage at 4.28 percent. The average rate for a 15-year fixed rate mortgage was 3.32 percent, a decrease of seven basis points.
The rate for a 5/1 adjustable rate mortgage was 3.03 percent, down by two basis points from the prior week. Discount points were unchanged for 30-year fixed rate mortgages at 0.70 percent, but dropped to 0.50 percent for 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.
Employment Sector: Surprise Results
The ADP payroll report showed a reading of 139,000 jobs added in February as compared to the prior month’s 127,000 jobs. ADP tracks private sector jobs. The BLS released its Non-Farm Payrolls report for February, which also surpassed expectations.
175,000 jobs were added against expectations of 140,000 jobs added and January’s reading of 129,000 jobs added. The national unemployment rate rose to 6.70 percent against an expected drop to 6.50 percent from January’s reading of 6.60 percent. Once again, foul weather was seen as a major influence.
What‘s Ahead This Week
This week’s economic news schedule is relatively light with no releases set for today.
Mortgage rates will be released by Freddie Mac on Thursday, along with weekly jobless claims. Retail sales and the University of Michigan consumer sentiment index round out next week’s schedule.
There is a fine line between adding color to your home décor and using too much color, so that you feel like you are living inside a rainbow.
A little bit of color will add a lot of fun and interest to your home design, but too much color can be overwhelming. How can you achieve that perfect balance?
Here Are Some Tips To Keep In Mind For Using Color In Your Home In A Subtle And Balanced Way:
- Use Color Schemes
Before choosing the colors for your décor, do a little bit of research into color schemes and how they work, so you know how to combine colors harmoniously.
For example, you can choose a complementary color scheme with shades that are across each other on the color wheel – such as blue and orange or purple and yellow.
Or you could try an analogous color scheme, which is a scheme where the colors are next to each other on the colour wheel – such as blue, green and purple.
- Use The 60/30/10 Rule
This is a rule that interior decorators use in order to use colors in a balanced way. Use the dominant color on 60% of the room, so that it will create a unifying look.
Then, use the secondary color on 30% of the room in order to add visual interest. Lastly, use an accent color for 10% of the room to add that little extra.
For example, you might use the dominant color for the walls and carpet, the secondary color for the upholstery and the accent color for some pillows, a wall hanging or a throw rug.
- Try An Accent Wall
Perhaps you have found a gorgeous paint color, but it’s just a little too bright and overwhelming to use for all four walls of a room.
In this case, you can simply paint one wall with the color and the other walls with a neutral tone, so that you can enjoy the shade without it being overpowering.
You could also simply use the color in one aspect of the room, such as the baseboards or the door jams.
These are just a few of the ways that you can incorporate color into your home design, without it being overpowering.
Last week’s economic news was mixed, with new home sales increasing and weekly jobless claims higher than expected.
Case-Shiller and FHFA home price reports reflected slower growth in home prices. Mortgage rates moved higher for the third consecutive week.
Weakness in the jobs sector and harsh winter weather were seen as factors contributing to economic events, but sales of new homes jumped unexpectedly to their highest since 2008.
Case-Shiller, FHFA Report Slower Growth for Home Prices
The Case-Shiller composite home price index for December reported that home prices declined by 0.10 percent in December, which was the second consecutive monthly decline.
On a seasonally adjusted basis, home prices rose 0.80 percent in December as compared to November’s reading of 0.90 percent. Year-over-year, home prices grew at a rate of 13.40 percent, their fastest pace since 2005.
The momentum of year-over-year home prices declined in December as compared to November’s year-over-year reading of 13.70 percent. 11 of 20 cities included in the Case-Shiller composite index declined.
Analysts said that low inventories of available homes, higher mortgage rates and severe winter weather contributed to slower growth in home prices.
FHFA’s quarterly House Price Index for the fourth quarter of 2013 posted its tenth consecutive gain in quarterly home prices. Seasonally adjusted home prices rose by 0.80 percent from November to December 2013.
FHFA, which oversees Fannie Mae and Freddie Mac, reported that home prices increased by 7.70 percent from the fourth quarter of 2012 to the same period in 2013. Adjusted for inflation, the agency reported a year-over-year increase of 7.0 percent.
FHFA House Price Index data is based on sales information for homes with mortgages held or securitized by Fannie Mae and Freddie Mac.
Fixed Mortgage Rates, New and Pending Home Sales Rise
Freddie Mac reported that average rates for fixed-rate mortgages rose last week, with the rate for a 30-year fixed rate mortgage rising 4 basis points to 4.37 percent.
The rate for a 15-year mortgage also increased by 4 basis points to 3.39 percent. The average rate for a 5/1 adjustable rate mortgage fell by 3 basis points to 3.05 percent. Discount points were unchanged at 0.7 0 percent for fixed rate mortgages and 0.50 percent for a 5/1 adjustable rate mortgage.
Weekly jobless claims also rose to 348,000 against projections for 335,000 new jobless claims. The four-week average for new jobless claims remained steady at 338,250.
The Department of Labor noted that weekly readings are more volatile than the four -week average reading. Poor winter weather and a softer labor market were cited as possible causes for the jump in new claims.
New home sales provided unexpected good news; they jumped by 9.60 percent in January, to a seasonally-adjusted annual rate of 468,000 sales against expected sales of 405,000.
December’s reading was upwardly revised from 414,000 to 427,000 new homes sold.
January’s reading was the largest increase in new home sales since July 2008, and there may be more positive housing news ahead as builders said that some of the sales lost during winter months may be recouped during spring.
Pending home sales increased by 0.10 percent in January to an index reading of 95 as compared to December’s reading of 94.9, which was the lowest reading since November 2011.
What‘s Coming Up
This week’s scheduled economic news includes construction spending, the Federal Reserve’s beige book report, weekly jobless claims, and Freddie Mac’s report on mortgage rates.
On Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls and National Unemployment reports for February.
Last week’s economic data supported recent reports indicating that housing markets are slowing, The National Association of Home builders/Wells Fargo Home Builders Index (HBI) dropped by 10 points to a reading of 46 for February.
Home builder confidence dropped to its lowest reading in nine months, and fell below the benchmark of 50, which indicates that more builders are pessimistic about current market conditions than not.
Severe weather was blamed for the lower builder confidence reading, which fell below the expected reading of 56.
Regional readings of builder confidence were also lower:
- Northeast: Builder confidence fell from 41 to 33 points. This suggests that weather is a major concern as this area has experienced a series of nasty winter storms.
- South: The HBI reading fell from 50 in January to 46 in February and was the smallest decline among the four regions. Fewer index points lost in the South appears to support builder’s concerns about bad weather in other regions.
- Midwest: Builder confidence dropped from 59 points to a reading of 50.
- West: Builder confidence fell by 14 points to February’s reading of 57. Desirable areas in the West had been leading the nation in home price appreciation. February’s reading may signal an easing of buyer enthusiasm as rapidly rising home prices have reduced affordable options for first-time and moderate income buyers.
Builders also cited concerns over labor and supplies as reasons for lower confidence readings.
Housing Starts Lower, Mortgage Rates Higher
On Wednesday, Housing Starts for January were released. Although analysts predicted a figure of 945,000 housing starts as compared to an upwardly adjusted 1.05 million housing starts in December, only 880,000 housing starts were reported for January.
The Department of Commerce also cited extreme winter weather as a cause for the drop in housing starts, which reached their fastest pace since 2008 in November. There is some good news. Economists said that housing starts delayed during winter could begin during spring.
According to Freddie Mac’s weekly survey, average mortgage rates rose across the board. The rate for a 30-year fixed rate loan rose by 5 basis points to 4.33 percent. The average rate for a 15-year fixed rate mortgage rose by two basis points to 3.35 percent.
The average rate for a 5/1 adjustable rate mortgage moved up by three basis points to an average rate of 3.08 percent. Discount points for all three products were unchanged with readings of 0.70 for 30-year and 15-year fixed rate mortgages and 0.50 percent discount points for 5/1 adjustable rate mortgages.
The Bureau of Labor Statistics reported that weekly jobless claims came in at 336,000 against expectations of 335,000 new jobless claims. The prior week’s reading was for 339,000 new jobless claims. Analysts said that job growth may be slowing after last year’s growth, but also noted that winter weather had slowed hiring in labor sectors such as construction and manufacturing.
Existing home sales fell by 5.10 percent in January according to the National Association of REALTORS®, which reported a seasonally-adjusted annual rate of home sales at 4.62 million sales against expectations of 4.65 million and December’s reading of 4.87 million sales of pre-owned homes. The national average home price rose to $188,900, which was 10.70 percent higher year-over-year.
January’s inventory of available existing homes was 1.9 million homes; this represented a 4.90 month supply of existing homes for sale. Real estate pros prefer to see at least a six month inventory of available homes for sale.
Next week brings a series of economic reports and opportunities for good news. The Case Shiller Home Price Indices, FHFA Home Price Index will be released. Consumer Confidence and the University of Michigan’s Consumer Sentiment report along with New and Pending Home Sales reports round out next week’s scheduled news.
Last week’s economic news was dominated by the first address by the new Fed chairperson, Janet Yellen. Tuesday’s news included the Jobs Openings report for December 2013, which matched November’s reading of 4.0 million jobs available. This information was taken from a gauge of competition for available jobs; in December, competition for job openings fell to its lowest level in five years.
Fed Chair Janet Yellen‘s First Address to House Janet Yellen addressed the House Financial Services Committee for the first time on Tuesday as Chair of the Federal Reserve. Ms. Yellen indicated that she expected “a great deal of continuity” in terms of Federal Open Market Committee (FOMC) monetary policy direction, and noted that markets should expect the FOMC to continue its support of low interest rates.
Chairman Yellen emphasized that the FOMC’s current tapering of its quantitative easing program was expected to continue, but is not on a pre-determined course. If economic conditions change, the Fed’s monetary policy would be adjusted according to such developments.
Mortgage Rates Mixed According To Freddie Mac According to Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS), the average rate for a 30-year fixed rate mortgage rose to 4.28 percent from the prior week’s 4.23 percent. The average rate for 15-year fixed rate mortgage mortgages was unchanged at 3.33 percent. The average rate for a 5/1 adjustable rate mortgage dropped from 3.08 percent to 3.05 percent. Discount points for each category were unchanged at 0.70 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.
In other news, Weekly Jobless Claims were higher last week at 339,000 against a forecast of 330,000 new jobless claims and the prior week’s reading of 331,000 new jobless claims. Analysts cited bad weather and the possibility of slower economic growth as factors, but said that it was too soon to tell if economic growth is slowing down. The University of Michigan’s Consumer Sentiment Index beat expectations with a reading of 81.2 against expectations for a reading of 80.0. February’s reading was unchanged from January.
What‘s Coming Up This week’s economic news includes the NAHB Home Builder’s Housing Market Index on Tuesday. Wednesday’s events include Housing Starts and the minutes from January’s FOMC meeting. In addition to Freddie Mac’s PMMS, Thursday’s scheduled reports include Weekly Jobless Claims, the Consumer Price Index (CPI) and Core CPI. Leading Economic Indicators (LEI) for January will also be released. The National Association of REALTORS® will release data for existing home sales in January on Friday.