Housing Snapshot - November 29, 2004 - 11/29/2004 - Mortgage Loan Refinance Debt Equity

Housing Snapshot - November 29, 2004

Last week brought good news on sales of new and existing single-family homes in October, but economists believe the market has crested and will start slowing down a bit as the Federal Reserve continues to exert upward pressure on interest rates. The cost of fixed-rate financing was largely unchanged last week, and Freddie Mac Chief Economist Frank Nothaft said that a year ago those mortgages were expected to have surpassed the 6% level by now, but have been slower to rise because of the economy's "soft patch" this spring. He predicted that further increases in mortgage rates are inevitable. They will rise, he predicted, to "a still home buyer-friendly range that will cause home sales to cool relative to their current record highs." Adjustable-rate loans were up last week, rising from 4.17% to 4.27%. In other economic news last week, the Commerce Department reported a 0.4% drop in factory orders for durable goods in October, led by a decline in new orders for automobiles and parts. The bad news, however, was partly offset by a larger increase in orders in September than initially indicated. In worrisome news for those planning their European vacations but favorable news for U.S. manufacturers, the dollar fell on Wednesday to an all-time low against the euro and may have some further distance to fall. The holiday shopping season appeared to get off to an auspicious start on the day following Thanksgiving, but before the weekend was over WalMart and some other retailers were grousing about slow sales. Retail sales are expected to be somewhat slower than last year, when they were up 5.1%, but it's the last 10 days before Christmas that analysts say really count. In a three-day rather than five-day week, Random Lengths reported somehat disappointing numbers from the lumber price front. Framing lumber rose from $357 to $361 per 1,000 board feet. Random Lengths' structural panel composite price rose from $334 to $340 per 1,000 square feet, compared to $500 a year earlier. Sales on oriented strand board were strong enough, it said, to keep upward pressure on prices.