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U.S. CONSUMER CONFIDENCE INDEX DECLINES IN OCTOBER
The Conference Board reported that the consumer confidence
index fell for the second straight month in October to 92.8
(1985 = 100) from 96.7 in September. The expectations and
present situation indices also fell to 92.0 and 94.2, respectively.
"Subdued expectations, as opposed to eroding present-day conditions,
were the major cause behind October's decline in consumer
confidence," said Lynn Franco, director of The Conference
Board's Consumer Research Center. "And, while consumers' assessment
of the labor market this month showed a moderate improvement,
the gain was not sufficient to ease concerns about job growth
in the months ahead." Consumers' outlook for the next six
months is cautious, with those anticipating business conditions
to improve decreasing to 20.6 percent in October from 21.6
percent the previous months. Additionally, consumers expecting
fewer jobs to become available in the coming months rose to
18.4 percent in October from 16.2 percent in September, while
those anticipating more jobs to become available slipped to
16.5 percent in October compared to 17.8 percent in previous
months.
LOAN APPLICATIONS INCREASE 8.2 PERCENT The
Market Composite Index of mortgage loan applications, a measure
of mortgage loan applications, stood at 761.7 for the week
ending Oct. 29, an increase of 8.2 percent on a seasonally
adjusted basis from 703.9 one week earlier, according to a
report released today by the Mortgage Bankers Association
(MBA). On an unadjusted basis, the Index increased 7.5 percent
for the week ending Oct. 29 compared with the previous week
and up 11.0 percent compared with the same week one year earlier.
The refinance share of mortgage activity decreased to 45.7
percent of total applications for the week ending Oct. 29
from 47.7 percent the previous week. The adjustable-rate mortgage
(ARM) share of activity decreased to 34.4 percent of total
applications for the week ending Oct. 29 from 34.9 percent
the previous week.
NEW HOUSING GOALS SET FOR FANNIE, FREDDIE
On Monday, the U.S. Dept. of Housing and Urban Development
finalized a rule that will require Fannie Mae and Freddie
Mac to increase their purchase of mortgages for low- and moderate-income
families and underserved communities. Effective Jan. 1, 2005,
the new rule increases housing goals and sub-goals year-by-year
from 2005 through 2008. For instance, the current goal for
underserved areas stands at 36 percent; under the new rule,
the goal will gradually increase to 39 percent by 2008. "These
new affordable housing goals will help the GSEs achieve the
standard that Congress intended --leading the mortgage finance
industry in helping low- and moderate-income families afford
decent housing," said HUD Secretary Alphonso Jackson. "These
new goals will push the GSEs to genuinely lead the market."
The final rule, which was published in the Federal Register
on Nov. 2, contains housing goals that are one percentage
point lower than originally proposed by HUD on April 5. HUD
reduced the goals after receiving over 300 comments from the
GSEs, Congress, and other organizations in the mortgage finance
industry. HUD projects that to reach the new housing goals,
the GSEs together will have to purchase an additional 400,000
goal-qualifying home loans during the four-year period of
2005-2008, above what they would have purchased without the
increase in the housing goals.
NAHB PREDICTS THE HOUSING MARKET WILL FLATTEN OUT
IN 2005 The consensus among economists participating
in the National Association of Home Builders' (NAHB) Construction
Forecast Conference in Washington, D.C., is that activity
in the housing industry will remain at robust levels in 2005.
"The housing market has been nothing short of phenomenal,
especially anything that smacks of homeownership," said NAHB
Chief Economist David Seiders. But the nation's housing market
is in the process of "reaching its limits" and "topping out."
Even though conference panelists were largely optimistic about
prospects for the residential construction industry, economic
growth, job growth and inflation, they forecast a decline
in housing starts for next year of approximately 4.2 percent
to 1.85 million units. Sales of new single-family homes are
estimated to decline 5.2 percent to 1.1 million units in 2005
from 1.16 million this year. According to Seiders, single-family
production is ready to set another record this year, even
with some households moving up their home-buying plans from
next year to this year in anticipation of rising mortgage
interest rates. Multifamily production will continue at an
annual pace in the 340,000-unit range, according to the forecast.
Information provided by - C.A.R. Newsline is published by
the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association
representing more than 135,000 REALTORS® statewide.
