Blog posted On March 04, 2019
Mortgage rates have not moved significantly this month and continue to hover around year-long lows. Economic indicators are finally catching up, after many reports including the new home sales report and US construction spending were delayed by the partial government shutdown. This week, December’s US construction spending report comes out on Monday, followed by December’s new home sales report on Tuesday. In labor market news, the ADP employment report is scheduled for release on Wednesday.
US construction spending tracks total spending on public and private construction projects and can be used to predict future housing market activity like new home sales. In November, US construction spending increased 0.8% month-over-month and 3.4% year-over-year to a seasonally adjusted annual rate of $1.3 trillion. National Association of Home Builders Chairman Randy Noel credited the construction activity to lower mortgage rates and positive economic conditions, commenting “the gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment. Low unemployment, solid job growth and favorable demographics should support housing demand in the coming months.”
New home sales or the sales of newly constructed homes make up about 10% of total real estate transactions. In November, new home sales surged, up 16.7% month-over-month to a seasonally adjusted annual rate of 657,000. More good news, data from August, September, and October were all revised upward.
The ADP employment report is based on data from approximately 400,000 US businesses employing approximately 23 million US workers. Although the data subset is limited to private companies who use the ADP payroll system, the figure is still used to review employment trends. In January, the ADP employment report added 213,000 jobs, exceeding forecasts.
All signs point to a busy Spring buying and selling season. Home buyers should expect a competitive market, especially with the recent downward trend in mortgage rates and slowdown in home price appreciation. Partnering with the right lender is your first step to getting your offer accepted. Lenders like me, who can ensure a quality preapproval or faster transaction, will help you stand out to a seller.