Looking Back Next week we will spend some time sharing predictions for 2015. But first we want to take a look back and see what happened in 2014. We started the year with a severe winter and a slowdown within the economic sector. We ended the year on an upswing best exemplified by the recently revised estimate for economic growth in the third quarter. The five percent growth rate was the strongest in over a decade. Though we are not expecting that the number for the last quarter of the year will come in at that level, there is also no evidence of a sharp slowdown in the rate of growth for the last quarter of the year. Employment growth picked up nicely in 2014. Well over two million jobs were created last year and the unemployment rate dropped almost one percent to below six percent with Decembers numbers still to be released. Inflation stayed tame this year and wage growth did not pick up significantly -- thus all was not a bed of roses with regard to the employment sector. On the other hand, the low inflation rate enabled mortgage rates to stay low throughout 2014 and oil prices dropped significantly, especially in the second half of the year. Meanwhile, the growth in the real estate market slowed somewhat in 2014. The pace of real estate sales leveled off and price gains were more moderate that the previous two years. As we have emphasized, the adjustments in the real estate sector are mainly related to the drop in distressed sales, which is actually a sign of normalization. Finally, the stock market was volatile but marched upward for most of the year as the bull market continued. This years gains of over ten percent for the S&P Index has contributed to a gain of well over seventy percent during the past five years -- completing the stock recovery from the financial crisis lows of March of 2009. To illustrate, the Dow closed at a low of 6,547 in March of 2009 and finished 2014 near 18,000, which now represents the fourth longest bull market in history. The Markets • Fixed rates on home loans trended upward for the second week in a row, but remained close to their lowest levels of the year in the past week. • Freddie Mac announced that for the week ending December 31, 30-year fixed rates rose to 3.87% from 3.83% the week before. • The average for 15-year loans increased to 3.15%. • Adjustables were stable, with the average for one-year adjustables increasing one tick to 2.40% and five-year adjustables remaining at 3.01%. • A year ago, 30-year fixed rates were at 4.53%, which continues to be over 0.5% higher than todays levels. • Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- While rates on home loans edged up this week, they remain near 2014 lows. Looking at full year data, the 30-year fixed-rate average for 2014 was 4.17 percent, the highest annual average since 2011. Also, the Conference Board reported that confidence among consumers rose in December and the S&P/Case-Shiller® Seasonally-Adjusted National House Price Index rose 4.6 percent over the 12-months ending in October 2014. Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Source: MarketWatch
Posted on: Tue, 06 Jan 2015 15:37:28 +0000
Trending Topics
Recently Viewed Topics
© 2015