Housing Snapshot - December 6, 2004 - 12/6/2004 - Mortgage Loan Refinance Debt Equity

Housing Snapshot - December 6, 2004

Signs of strong economic growth boosted mortgage interest rates last week, but the cost of 30-year, fixed-rate financing still remained below 6% and was slightly less than a year earlier. "Recent economic indicators came out better than had been anticipated, buoying financial markets this week, and reinvigorating confidence in financial markets that the last three months of the year will post a very positive rate of economic growth," said Frank Nothaft, chief economist of Freddie Mac. The Commerce Department reported midweek that the Gross Domestic Product was up 3.9% in the third quarter, somewhat faster than indicated earlier. Also sweet music to the financial markets were oil prices, which fell four days in a row to $43 a barrel, the lowest level in two-and-a-half months. Last week ended on a sour note for the economy, however. Retail sales grew a disappointing 1.7% in November, suggesting mixed results for this year's holiday shopping season. And the Labor Department announced that 112,000 new jobs were created in November, below the 150,000 monthly pace that economists say is needed to keep pace with the employment needs of the country's growing population. News on the lumber price front was also sobering, as unseasonably moderate weather in many parts of the country kept construction sites active and demand for building materials up at a time of the year when inventories run lean. Random Lengths reported that framing lumber rose from $361 to $373 per 1,000 board feet, compared to $342 a year earlier. Random Lengths' structural panel composite price climbed from $340 to $377 per 1,000 square feet, still well below the year-earlier price of $434. A surge in sales of oriented strand board helped spur the price hike.