02
Feb
By First Rate Financial Group
Financial Reports

S&P Case-Shiller Home Price Indices: Home Prices Fall In November

S&P Case-Shiller Home Price Indices: Home Prices Fall In NovemberU.S. home prices continued to fall in November according to S&P Case-Shiller’s month-to-month national and 20-city home price indices, but home price growth rates remained in positive territory year-over-year. The national home price index posted a  7.70 percent year-over-year home price growth rate as of November 2022.

20-city home price index posts 5th consecutive month-to-month decrease in November

The S&P Case-Shiller 20-city home price index for November reported that the top three cities for home price growth were Miami, Florida with a year-over-year home price growth rate of 18.4 percent; Tampa, Florida followed with a  year-over-year home price growth rate of 16.9 percent. Atlanta Georgia reported a  12.7 percent growth rate for year-over-year home prices.

Home prices tracked in the 20-city home price index rose at a 6.8 percent year-over-year- pace in November as compared to year-over-year home price growth of 8.6 percent posted in October 2022. 19 of 20 cities included in the S&P Case-Shiller  20-city home price index reported lower home prices in November; only Detroit Michigan reported a gain in month-to-month home price growth.

FHFA: prices drop for homes owned or financed by Fannie Mae and Freddie Mac

In related news, the Federal Housing Finance Agency, which oversees government-sponsored mortgage enterprises  Fannie Mae and Freddie Mac, reported that home prices for homes financed or owned by Fannie Mae and Freddie Mac dropped by 0.10 percent month-to-month and rose by 8.2 percent year-over-year.

Nataliya Polkovnichenko, Ph.D. and Supervisory Economist in the FHFA’s Division of Research and Statistics, said:  “ U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand for homes, low inventories of houses for sale have helped maintain relatively flat house prices.”

Changes in seasonally adjusted home price changes ranged across the nine Census Divisions from -1.1 percent in the Pacific Division to +0.5 percent in the West North Central Division.  Year-over-year home price gains ranged from  +2.4 percent in the Pacific Division to +12.0 percent in the South Atlantic Division.”

Data included in the FHFA House Price Index are gathered from reports on single-family home prices ranging from the 1970s to the present and include single-family home transactions in all 50 states and more than 400 U.S. cities.

03
Oct
By First Rate Financial Group
Market Outlook, Mortgage

What’s Ahead For Mortgage Rates This Week – October 3, 2022

What's Ahead For Mortgage Rates This Week - October 3, 2022Last week’s economic news included readings on home prices, pending home sales, and inflation. The University of Michigan released its monthly reading on consumer sentiment and weekly readings on mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices: Home Price Growth Slower in July

According to S&P Case-Shiller’s national reading for July home prices, home price growth slowed by -2.90 percent in July as compared to +3.00 percent growth in June. This reading supported analysts’ expectations of a cooling housing market after months of rapidly rising home prices in many areas.  The S&P Case-Shiller 20-City Home Price Index, which is a benchmark report used by real estate professionals, also posted slower home price gains for July. All 20 cities reported slower home price gains year-over-year in July.

The top three cities in the 20-city index for July with Tampa, Florida posting a year-over-year home price gain of 31.80 percent; Miami, Florida followed closely with a year-over-year home price gain of 31.70 percent and Dallas, Texas reported a year-over-year home price gain of 24.70 percent.

Mortgage rates approached seven percent last week and increased affordability concerns for would-be home buyers. Pending home sales declined by 2.00 percent in August; Analysts expected pending sales to decrease by 1.40 percent.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 41 basis points to 6.70 percent; the average rate for 15-year fixed-rate mortgages rose by 52 basis points to 5.96 percent. Rates for 5/1 adjustable rate mortgages rose by 33 basis points and averaged 5.30 percent. Discount points

for 30-year fixed-rate mortgages averaged 0.90 percent; discount points for 15-year fixed-rate mortgages averaged 1.30 percent and points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Initial jobless claims fell to 193,000 claims filed as compared to the previous week’s reading of 209,000 first-time claims filed. Analysts predicted a reading of 215,000 initial jobless claims filed.

The University of Michigan’s Consumer Sentiment Index for August reported an index reading of 58.60 as compared to the expected reading of 59.50 and July’s index reading of 59.50. Decreased consumer sentiment is  related to high inflation and rising rates for mortgages and consumer credit.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, public and private sector job reports, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

 

28
Jul
By First Rate Financial Group
Housing Market

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

U.S. home prices rose in May, but at a slower pace. S&P Case-Shiller’s National Home Price index reported year-over-year home price growth of 19.70 percent in May as compared to April’s record year-over-year home price growth pace of 20.60 percent. Tampa, Florida led the 20-City Index with year-over-year home price growth of 36.1 percent; Miami, Florida followed with year-over-year home price growth of 34.0  percent. Dallas, Texas reported year-over-year home price growth of 30.8 percent.

Minneapolis, Minnesota, Chicago, Illinois, and Washington, D.C. had the lowest rates of home price growth, but no cities in the 20-City Home Price Index reported declines in home prices. Economists said that slowing growth in home prices could signal that home prices have peaked after years of rapid appreciation.

Affordability, Rising Mortgage Rates Impact Home Price Growth

Rapid home price growth is self-limiting in terms of affordability and the ability of home buyers to qualify for mortgages needed to complete their purchases. Rising mortgage rates also impact affordability as higher mortgage rates reduce funds available for purchasing homes. Current rates for a 30-year fixed-rate mortgage averaged 5.54 percent last week as compared to 2.78 percent approximately one year ago.

Craig J. Lazzara, managing director at S&P Dow-Jones Indices, said that deceleration in home price growth was already occurring and he cautioned that a more challenging environment “may not support extraordinary home price growth much longer.” Analysts said that high mortgage rates and rising home prices would ease demand for homes and would slow rapid home price growth in the coming months, but they did not expect significant reductions in home prices to occur immediately.

The Federal Reserve raised its key interest rate range by 0.75 percent on July 27 and is expected to continue raising its rate range throughout 2022 in its efforts to ease inflation. As interest rates rise for credit cards, home loans, and personal loans increase, consumer demand is expected to ease and calm rapid inflation.

FHFA Home Prices Rise in May

The Federal Housing Finance Agency reported that home prices for properties owned or financed by Fannie Mae and Freddie Mac rose by 1.4 percent month-to-month and 18.3 percent year-over-year in May. Fannie Mae and Freddie Mac’s loan limits impact prices for homes owned or financed by the two government-sponsored enterprises.

Will Doerner, Ph.D. and supervisory economist at Freddie Mac, said: “House prices continued to rise in May but at a slower pace. Since peaking in February, price appreciation has moderated slightly. Price growth remains above historical levels and was supported by the low inventory of properties for sale.” Signs of slowing economic growth, rising mortgage rates, and fears of recession also sidelined would-be home buyers.