Home builder sentiment across the nation edged lower in December, but still remains robust as 2014 comes to an end. The National Association of Home Builders Housing Market Index fell to 57 this month, which was just below the 58 expected and down from the 58 recorded in November. Any number above 50 indicates that more builders view conditions as good rather than poor. Within the report it showed that current sales conditions and expectations for future sales declined, while the traffic gauge of prospective buyers held steady.
In another sign that the U.S. economy has improved from the depths of the Great Recession, the Federal Reserve reported on Monday that factory production rose by 1.1% in November from October. Output at factories has risen 4.8% over the past year, which is above levels seen before December 2007. Despite a global slowdown, the U.S. has continued to recover, led by a boost in auto sales, food, wood, plastics and rubber products.
Today is the busiest day of the shipping season for the U.S. Post Office and FedEx with just 10 days until Christmas. The nation’s largest shipper, the Post Office, says it will process 640 million pieces of mail on Monday, up 33 million from last year. The Post Office further reported that between Thanksgiving and Christmas, it expects to deliver 12.7 billion cards, letters and packages. FedEx reports that it will ship 22.6 million packages on Monday while it will deliver 290 million packages during the same period, up 9% from 2013.
The National Federation of Retailers (NRF) reported today that Black Friday weekend sales didn’t sizzle, which could be attributed to deals that began before Thanksgiving. The NRF said that sales from Thanksgiving through Sunday is estimated to hit $50.9 billion, down from the $57.4 billion in 2013, an 11% decline. The NRF went on to say that during the four-day period, 2014 online sales will be flat from last year. Another reason for the ease in sales could be that shoppers are holding out until later in the holiday shopping season to see if they can get better deals.
In a move that could potentially make it possible for hundreds of thousands of additional consumers to get mortgages, Fannie Mae and Freddie Mac have relaxed lending standards beginning today, December 1st. The new measures stem from an agreement in October where lenders had blamed the lack of clarity on when they would be penalized for making mistakes on mortgages they sell to Fannie and Freddie. The new standards should include faster turnaround times for mortgage applications to be processed. In addition, lenders be able to consider reduced credit scores and look past one time events when consumers suffered a hit on credit scores.
Fannie Mae released its Economic and Housing Outlook report for November late last week revealing that “economic growth in the U.S. is slowing from the strong mid-2014 numbers to a more moderate pace heading into next year.” Fannie Mae said that full economic growth is expected to be around a modest 2.5% in 2015. Fannie went on to say their view of housing starts, home sales, and home price trends will be largely unchanged next year and that “mortgage activity in 2015 will be very similar to 2014.”