The Commerce Department released December’s Housing Starts data this week. A housing start is the beginning of a new home build (breaking ground). The data showed that new construction starts for single family homes increased 4.4% over November starts. The chart below also provides clarity in the upward trend in housing starts, a good sign the housing moving forward.
How This May Affect the Cost of Purchasing a Home in the Long Term
This data suggests that purchasing a home may be cheaper in the short term over the long term. As the market gains strength, buyers are likely to continue increasing, which could drive home values up. This coupled with the reality that we will very likely be seeing mortgage rates come of their current all time historical lows mean that we may be in a key window where purchasing a home may have significantly lower costs than it may in the coming months and years.
Positive Employment Data Released
There was also positive news coming from the the Labor Department which said that only 352,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week’s revised total of 402,000. This is positive news for employment and shows increased strength in the employment sector.
Mortgage Outlook for the Week of January 23, 2012
Next week will see the FOMC meet on January 24-25. Additionally, there will be data released for Pending Home Sales, Jobless Claims, GDP and New Home Sales.