28
Jan
By support
Housing Market

Case-Shiller: Home Price Growth Slower in November

Case-Shiller: Home Price Growth Slower in November

Case-Shiller Home Price Index reports for November indicate that home price growth continues to slow. The 20-City Home Price Index dropped by 0.20 percent to November’s reading of 4.30 percent year-over-year. 

The five cities with highest year-over-year home price growth rates in November were:

San Francisco, California 8.90%

Miami, Florida 8.60%

Las Vegas, Nevada and Dallas, Texas 7.70%

Denver, Colorado 7.50%

The five cities with the lowest year-over-year growth in home prices were:

Cleveland, Ohio 0.60%

Washington, DC 1.90%

New York, New York and Minneapolis, Minnesota 1.50%

Chicago, Illinois 2.00%

There were no instances of year-over-year depreciation in home prices for the year-over-year readings, but month-to-month readings indicated that slower momentum in year-over-year home prices is producing negative home price readings on a month-to-month basis. First the good news; although no city included in the 20-City Home Price Index had month-to-month home prices increases of one percent or more, there were some gains.

Month-to-Month Home Price Readings Mixed

According to the Case-Shiller 20-City Home Price Index for November, 12 cities posted month-to-month gains for home prices and eight cities saw home prices decline from October to November.

The five cities with the highest month to month home price growth in November were:

Tampa, Florida 0.80%

Miami, Florida 0.60%

Las Vegas Nevada 0.50%

Los Angeles and San Diego, California 0.50%

San Francisco, which led year-over-year home price growth rates for November, posted a month-to-month gain of 0.10 percent.

The five cities with the highest declines in month-to-month home price growth were:

Chicago, Illinois -1.10%

Detroit, Michigan -0.90%

New York, New York -0.80%

Minneapolis, Minnesota -0.70%

Washington, DC -0.50%

In spite of gloomy month-to-month readings for November home prices for cities included in the Case-Shiller 20-City Home Price report, overall signs of economic growth persist. In separate reports released Tuesday, The Department of Commerce reported that December sales of new homes rose by 11.60 percent year-over-year.

481,000 newly constructed homes were sold in December as compared to expectations of 455,000 new homes sold and November’s reading of 431,000 sales of new homes in November.

Home Sales Should Continue to Increase with Warmer Weather

As warmer weather approaches, it’s likely that overall home sales will continue to increase. Stronger job markets, low mortgage rates and the possibility of relaxing mortgage standards likely contributed to a jump in consumer confidence for January.

Consumer confidence increased from December’s index reading of 93.10 to 102.90, which was the highest reading since August 2007. Analysts had forecasted an index reading of 96.90 for January. Expectations of wage growth, which has been largely flat post-recession, were seen a significant contribution to January’s boost in consumer confidence. 

05
Jan
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – January 5, 2015

Whats Ahead For Mortgage Rates This Week January 5 2015Case-Shiller reported that home prices hit their lowest pace in two years. According to the Case-Shiller 20-City Home Price Index for October, home prices fell in 10 cities, rose in eight cities and were unchanged in two cities.

In other news, pending home sales increased and weekly jobless claims rose. The details:

Case-Shiller: Home Price Growth Lowest in Two Years

According to its 20-City Home Price Index, Case-Shiller said that home prices dropped by 0.10 percent to a reading of 4.50 percent year-over-year as compared to September’s reading of 4.80 percent year-over-year. Analysts expected home price growth to drop to 4.70 percent in October.

David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said that 2014 could finish on a strong note with price growth accelerating in 2015. Home price growth hasn’t hit double digits since April, but there is encouraging news on the horizon.

More than half of states’ average home prices are set to surpass housing bubble peaks in 2015. Through October, home prices were approximately 15 percent below a 2006 peak. Higher inventories of available homes and lower mortgage rates are seen as stabilizing influences on housing markets, and could also encourage more buyers into the market. 

Pending Home Sales Up, Mortgage Rates Mixed

The National Association of Realtors® reported that November pending home sales rose to a reading of 0.80 percent from October’s reading of -1.10 percent. The seasonally-adjusted index reading for November was 104.8.

Lawrence Yun, NAR’s chief economist noted that steady economic growth and hiring contributed to home buyer confidence. Regional readings for pending home sales were +1.40 percent in the Northeast, +1.30 percent in the South and +0.40 percent in the South. Pending home sales declined by -0.40 percent in the Midwest.

Fixed mortgage rates rose last week. Freddie Mac reported that average rates for 30-year and 15-year mortgages rose to 3.87 percent and 3.15 percent respectively; the average rate for a 5/1 adjustable rate mortgage was unchanged at 3.01 percent.

Discount points for all types of mortgages were unchanged at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

Jobless Claims Up

Weekly jobless claims rose to 298,000 new claims against expectations of 290,000 new claims and 281,000 new claims filed the previous week. This was the highest reading since Thanksgiving.

Analysts said that seasonal hiring fluctuations and the volatility of week-to-week claims cause weekly reports to be less reliable than the four-week rolling average of jobless claims, which fell by 250 claims to a reading of 290,750.

Continuing claims fell by 53,000 to a reading of 2.35 million in the week ending December 20. This reading was close to a 14 year low.

Overall, analysts viewed stronger labor markets and economic growth as positive signs for 2015.

What’s Ahead

Next week will resume a full schedule of economic events including construction spending, ADP employment, Non-Farm Payrolls and the national unemployment rate. The Federal Reserve will release the minutes from the most recent meeting of the Federal Open Market Committee (FOMC).

29
Dec
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – December 29, 2014

What's Ahead For Mortgage Rates This Week December 29 2014Last week’s economic news included several housing related reports. Housing markets continue to cool as November reports on existing and new home sales fell below expectations. New Jobless claims were lower than expected by 10,000 claims. The details:

Existing and New Home Sales Down, FHFA House Price Index Up

The National Association of Realtors® reported that November sales of existing homes fell to 4.93 million sales against expectations of 5.18 million sales. October’s reading was revised from 5.25 million sales to 5.26 million. This was seen as an anomaly that may have occurred during uncertainty caused by volatile stock markets. Federal Reserve Chair Janet Yellen slow housing markets to tight lending standards in a recent statement.

FHFA reported that October home prices connected with Fannie Mae and Freddie Mac mortgages increased incrementally year-over-year. October house prices increased to 4.50 percent year-over-year as compared to September’s year-over-year house price increase of 4.40 percent.

November sales of new homes fell short of expectations according to the Commerce Department. 438,000 new homes were sold as compared to expectations of 450 new home sales and September’s reading of 445,000 new homes sold. This was the slowest rate of growth in four months.

New home sales declined in three of four regions. Readings for November were -12.00 percent in the Northeast, -6.40 percent in the Southeast, -6.30 percent in the Midwest. Sales of new homes rose by 14.80 percent in the West. Analysts typically caution against reading too much into volatile month-to-month figures, but they are concerned about longer-term sales trends too. Sales of new homes were 1.60 percent lower year-over-year.

The median sale price of new homes was $280,900 in November, which was 1.40 percent higher year-over-year.

Mortgage Rates Up, New Jobless Claims Down

Mortgage rates rose across the board according to Freddie Mac’s weekly survey of average mortgage rates. The average rate for a 30-year fixed rate mortgage increased three basis points to 3.83 percent. The average rate for a 15-year mortgage rose one basis point to 3.10 percent. The average rate for a 5/1 adjustable rate mortgage was six basis points higher at 3.01 percent. Discount points were 0.60 for 30 and 15-year fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

280,000 new jobless claims were filed last week, a seven-week low. Analysts expected 290,000 new claims based on the prior week’s reading of 289,000 new claims. The four-week rolling average of new jobless claims also showed improvement with 8500 fewer claims at 290,250 new jobless claims filed. Stronger labor markets are considered good news for housing markets as more consumers can afford to buy homes.

No economic reports were scheduled Thursday or Friday due to the Christmas holiday.

What’s Ahead

This week brings Case-Shiller Home Price reports, Pending Home Sales and Construction Spending. Freddie Mac mortgage rates and Weekly Jobless Claims will be released on Wednesday due to the New Year’s Day holiday on Thursday.