Housing Snapshot - June 28, 2004 - 6/28/2004 - Mortgage Loan Refinance Debt Equity

Housing Snapshot - June 28, 2004

Mortgage interest rates subsided slightly last week, and Freddie Mac economists are predicting that they will remain in the affordable 6%-7% range for the balance of this year. In the last week, the Commerce Department has released a wealth of statistics indicating that the economy continues to grow vigorously. The Gross Domestic Product was 3.9% in this year's first quarter, down slightly from 4.1% in the previous three months; consumer spending was up 1% in May, the strongest increase in two-and-a-half years; and incomes in May were up 0.6%, following an identical increase in April. Inflation in the first quarter averaged 3.2%, up from 1% in the final quarter of 2003. The rate of inflation will dictate how rapidly the Federal Reserve Board pushes up interest rates in coming months, but so far the consensus is that prices will remain fairly well behaved despite today's convincing pick-up in the nation's economy. On the lumber front, prices continued to recede. Framing lumber dropped $10 to $409 per 1,000 board feet, according to Random Lengths. The price of 15/32-inch 3-ply CDX southern west-east plywood dropped $40 to $315 per 1,000 square feet, and oriented strand board was down to $300, also representing a $40 decline from the week before.