29
Jun
By First Rate Financial Group
Financial Reports

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices Up

S&P Case-Shiller Housing Market Indices: Short Supply of Homes for Sale Pushes Prices UpApril readings for S&P Case-Shiller’s Housing Market Indices showed gains in home prices throughout the U.S. Rising prices were caused by shortages of previously-owned homes for sale and increasing buyer demand as the average 30-year mortgage rate exceeded six percent.  The southeastern region lost its top spot on S&P Case-Shiller’s 20-City Home Price Index as Chicago, Illinois, Atlanta, Georgia, and Tampa, Florida held the top three year-over-year home price growth rates for April.

Chicago, Illinois Breaks Southeast’s Lead on April Home Price Growth

The top three cities with the highest home price growth rates as reported in April’s   S&P Case-Shiller’s 20-City Home Price Index were Chicago, Illinois with a  year-over-year home price gain of 4.10 percent;  Atlanta, Georgia posted a year-over-year home price growth of 3.50 percent.  Tampa, Florida placed third in the 20-City Index with an average home price gain of 2.40 percent. All year-over-year readings for April home prices were seasonally adjusted.

Average home prices lagged in the West as the combined impact of high home prices and mortgage rates created affordability issues for would-be home buyers. Seattle, Washington saw average home prices drop by -12.40 percent year-over-year; San Francisco, California reported that year-over-year home prices declined by 11.10 percent in April. Home prices in Las Vegas, Nevada fell by 6.60 percent year-over-year.

Mortgage rates nearing 7 percent did not appear to impact home buyers to a great extent, but higher rates do increase the cost of home loans and monthly payments; current mortgage rates and rising home prices do not promote affordable opportunities for first-time and moderate-income home buyers.

FHFA House Price Index

In related news, the Federal Housing Finance Agency posted 0.50 percent month-to-month-home price growth in its  House Price Index for April. This index reports on home prices for homes sold by the Government Sponsored Enterprises Fannie Mae and Freddie Mac. These homes were acquired through foreclosure and were subject to original loan limits established by FHFA for mortgages acquired or guaranteed by Fannie Mae and Freddie Mac The GSEs’ loan limits cause a more moderate range of home price growth reported in  FHFA’s House Price Index as compared to data reported in the S&P Case-Shiller Home Price Indices.

26
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 26, 2023

What's Ahead For Mortgage Rates This Week - June 26, 2023Last week’s scheduled economic reports included readings on housing starts, existing home sales, and Federal  Reserve Chair Jerome Powell’s congressional testimony. Weekly readings on mortgage rates and jobless claims were also released.

National Home Builders Association Releases June Housing Market Index

U.S.  home builder confidence rose by five points to an index reading of 55 in June according to the National Association of Home Builders Housing Market Index. The June reading surpassed the expected reading of 51 and May’s housing market index reading of 50. Component readings for the Housing Market Index also rose as builder confidence in current market conditions rose five points and confidence in market conditions for the next six months rose six points.

NAHB said that a shortage of previously-owned homes for sale is driving sales of new homes and rising builder confidence. Many current homeowners refinanced to very low rates available during and immediately after the pandemic and are not inclined to refinance or buy new homes at current higher interest rates.

Mr. Robert Dietz, the chief economist for the NAHB, said: “A  bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year.” Mr. Dietz also noted that “with the Federal Reserve nearing the end of its tightening cycle, it’s good news for future market conditions in terms of mortgage rates and the cost of builder and developer loans.”

June’s reading was the sixth consecutive month showing increasing home builder confidence and the 11th month since builder sentiment moved into positive territory.

Mortgage Rates Fall

Freddie Mac reported lower average mortgage rates last week as rates for 30-year fixed-rate mortgages fell by two basis points to 6.67 percent and rates for 15-year fixed-rate mortgages fell by seven basis points to an average rate of 6.03 percent.

Sales of previously-owned homes rose to a seasonally-adjusted annual rate of 4.30 million sales as compared to the expected reading of 4.25 million sales and April’s reading of April’  reading of 4.29 million sales.

What’s Ahead

This week’s scheduled economic reporting includes readings from S&P Case-Shiller Indices, new and pending home sales, and inflation. Weekly readings on mortgage rates and jobless claims will also be released.

19
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 19, 2023

What's Ahead For Mortgage Rates This Week - June 19, 2023Last week’s scheduled economic reports included readings on inflation, the Fed’s Federal Open Market Committee meeting, and Fed Chair Jerome Powell’s press conference. Weekly readings on mortgage rates and jobless claims were also published.

Fed Leaves Key Rate Range Unchanged

Federal Reserve policymakers left the Fed’s current interest rate range unchanged at 5.00 to 5.25 percent; the Fed decision was announced after a scheduled meeting of the Fed’s Open Market Committee ended on Wednesday. Factors contributing to the  FOMC policymakers’  decision included the cumulative effects of tightening monetary policy, lags between changing monetary policy and any impact on the economy, along with inflation and global and domestic economic developments.

The Committee reasserted its commitment to returning the inflation rate to its two-percent goal. Factors considered by FOMC Committee members include readings on labor markets, inflationary pressures and expectations, along with domestic and global economic and financial developments.

Inflation Pace Eases in May

The federal government reported slower inflation during May. The Consumer Price Index posted month-to-month inflationary growth of 0.10 percent from April to May; this reading matched expectations and was lower than April’s reading of 0.40 percent month-to-month. Core inflation, which excludes volatile food and fuel sectors, matched expectations and was unchanged from April’s month-to-month reading of 0.40 percent growth. Core inflation rose by 5.30 percent year-over-year and matched expectations but was lower than April’s year-over-year core inflation reading of 5.50 percent growth.

Mortgage Rates Fall; Weekly Jobless Claims Unchanged

Freddie Mac reported lower average mortgage rates as rates for 30-year fixed-rate mortgages fell by two basis points to 6.69 percent. Rates for 15-year fixed-rate mortgages rose by three basis points to an average rate of 6.10 percent. Jobless claims held steady with 262,000 new claims filed, which exceeded the expected reading of 245,000 initial claims and matched the previous week’s reading.

The University of  Michigan’s Consumer sentiment survey improved in June with an index reading of 63.9, which surpassed the expected reading of 60.8 and May’s index reading of 59.2.  Readings over 50 indicate that most consumers have a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic reporting includes readings on home builder confidence, housing starts,  and sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims will also be released.