Keeping an Eye on Housing

13.4%: Decrease in new home sales in July

A recent report shows that new-home sales plunged 13.4% in July, the biggest drop in three years. The bond market quickly took notice on the day of the report, and as a result bond prices rallied and yields fell, showing how critical the housing market is to the broader economic recovery.

In other housing news, as interest rates have climbed, mortgage rates have followed suit. The cost of a 30-year conventional mortgage is now at about 4.7%, up from 3.6% in early May, and the monthly mortgage payment on a median US house has increased roughly $200 during the same period. As rates (and mortgage costs) have risen, mortgage and home sales activity has started to falter. A recent Mortgage Banker Association survey shows loan activity down by more than 50% from a May peak.

Read this week's US Commentary for more on how housing affects the US economy.

Source: BlackRock, August 2013

http://www2.blackrock.com/

Prepared by BlackRock

Delivered courtesy Joel W. Grams, CRPC®, CLTC,

Registered Representative, 212 Capital Group

38 Main Street Suite 360, Westlake Ohio 44145

(440) 835-4501 Ext 17, jgrams@212capitalgroup.com

The foregoing discussion is general in nature and not intended as specific advice. New England Financial nor its representatives are engaged in rendering tax, accounting or legal advice. A qualified professional should be consulted regarding the effect of such considerations on the matters covered in this publication.

For information on New England Financial insurance or other financial products and services, please contact

Joel W. Grams, CRPC®, CLTC,  <Agent Name>, Registered Representative, with/New England  Financial 38 Main Street Suite 360, Westlake, OH 44145, at (440) 835-4501 ext. 17, jgrams@212capitalgroup.com

www.212capitalgroup.com              

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