04
Jan
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – January 04, 2016

Whats Ahead For Mortgage Rates This Week January 04 20162015 said farewell with reports on Case Shiller home prices, pending home sales, and consumer confidence. The details:

Case-Shiller Home Prices Post Double Digit Gains in October

According to Case-Shiller’s 20 City Home Price Index, Denver, Colorado, Portland, Oregon and San Francisco, California tied for the highest home price gains in October with year-over-year home price gains of 10.90 percent. Lowest annual price gains were posted by Chicago, Illinois at 1.30 percent followed by Washington, D.C with a year-over-year –reading of 1.70 percent. Home prices rose at their fastest rate since August 2014 according to Case-Shiller.

Month-to-month home prices showed mixed results in October. Miami, Florida posted the highest month-to-month gain of 0.70 percent. San Francisco, California posted a gain of 0.60 percent; Phoenix, Arizona and Portland, Oregon posted month-to-month home price gains of 0.60 percent.

Cities posting month-to-month declines in home prices included Chicago, Illinois where home prices declined 0.70 percent, Cleveland Ohio and San Diego, California posted month-to-month declines of 0.40 percent, Washington, DC home prices dropped 0.30 percent month-to-month. Home prices in Boston, Massachusetts and Las Vegas, Nevada were unchanged in October from September readings.

While Case-Shiller’s 20-City Index remains 11 to 13 percent below 2006 peak home prices, the index is approximately 36 percent higher than lowest home prices posted in 2012.

Pending Home Sales Dip in November

According to the National Association of Realtors®, pending home sales dipped 0.90 percent in November after posting a gain of 0.20 percent in October. Analysts expected a 1.0 percent gain in pending sales for November. Pending home sales peaked in May 2015, but short supplies of available homes and rising prices have caused home sales to slow. Pending home sales are defined as homes for which a sales contract is signed, but aren’t yet closed. November’s pending sales were 2.70 percent higher than for October and represented the 15th consecutive month of annual gains in pending home sales.

Regional results for November’s pending sales were mixed. The Northeast reported a reading of 91.8, which was nearly three points lower than October’s reading. The Western region posted a reading of 100.4, a decline of nearly 6 points. The Midwestern region posted a gain of one point to a reading of 104.9. The South had the strongest reading for pending home sales in November with a reading of 119.9, which represented an increase of 1.50 percent.

The National Association of Realtors® expects sales of pre-owned homes to top out at 5.25 million for 2015, which would be the highest reading since 2006. The national median home price for pre-owned homes is $220,700, which is six percent higher than in November 2014.

Mortgage Rates, Consumer Confidence Rise

Freddie Mac reported that the average mortgage rates rose across the board last week. The average rate for a 30-year fixed rate mortgage was three basis points higher at 4.01 percent; the average rate for a 15-year fixed rate mortgage was two basis points higher at 3.24 percent and the average rate for a 5/1 adjustable rate mortgage also rose two basis points to 3.08 percent. Average discount points were unchanged at 0.6, 0.6 and 0.4 percent respectively.

On a positive note for year-end, consumer confidence increased to a reading of 96.5 in December as compared to November’s upwardly revised reading of 92.6 and an expected index reading of 93.50. Analysts were relieved to see increasing consumer confidence after an unexpected decline in November.

What’s Ahead

This week’s scheduled economic news includes reports on construction spending, the government’s Non-farm Payrolls report and ADP’s payroll reports. Labor reports act as potential indicators of future housing markets as steady employment is typically a major factor in home-buying decisions.

28
Dec
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – December 28, 2015

Whats Ahead For Mortgage Rates This Week December 28 2015This week’s report of economic events is shortened due to the Christmas holiday. Economic news through Wednesday included Existing Home Sales, New Home Sales and Consumer Spending. The details:

Existing Home Sales Dip, New Home Sales Rise

According to the National Association of Realtors®, sales of previously owned homes dipped from October’s seasonally adjusted annual rate of 5.32 million sales to 4.76 million sales of pre-owned homes. This was considerably lower than analysts’ expectations of 5.30 million sales. Factors seen as contributing to November’s reading included pent-up demand caused by low inventories of available homes and affordability issues emerging as demand pushes home prices up. New regulations that extended the closing period for home sales were cited as causing some closings to be pushed into December. 

In contrast to lower sales for pre-owned homes, November sales of new homes rose by 4.30 percent from October to November based on a revised October reading of 470,000 sales. The original October reading was 495,000 sales of new homes, which provided the basis for analyst projections of 505,000 new homes sold on a seasonally-adjusted annual basis.

New home sales were up by 9.10 percent year-over-year in November. New home sales account for approximately 9.30 percent of home sales. Regional reports for new home sales were mixed. The Northeast region reported a drop of 28.60 percent, while the Midwest reported a gain of 20.50 percent. New home sales rose 4.50 percent in the South and fell 8.60 percent in the West. The good news about new home sales softened concerns about cooling housing markets caused by the abrupt drop in home resales.

Last week’s financial news ended on a positive note with December’s reading of 92.60 for consumer sentiment rose from November’s reading of 91.30 and also surpassed analysts’ expected reading of 92.

What’s Ahead

This week’s roster of economic reports includes Case-Shiller Home Price Indexes, Pending Home Sales and Consumer Sentiment for December. No reports will be issued Friday in observance of the New Year’s Day holiday.

23
Dec
By support
Market Outlook

Existing Home Sales Dip More Than Expected

The 3 Golden Rules of Staging - Follow These and Sell Your Home FasterNovember sales of pre-owned homes dipped lower than expected and prior month’s readings according to the National Association of Realtors® (NAR). Analysts expected existing home sales to slow to a seasonally-adjusted annual rate of 5.30 million sales, which was based on October’s reading of 5.32 million sales. Instead, November’s reading dropped to 4.76 million sales. November’s drop represented a decline of 10.50 percent drop in existing home sales month-to-month; existing home sales were 3.80 percent lower year-over-year.

November’s reading represented the first time since September 2014 that the year-over-year reading for sales of pre-owned homes was lower than for the previous month. November’s reading was also the sharpest dip in pre-owned home sales since July 2010 and was cited as a “statistical anomaly.” Such a sharp drop in sales is unusual except when housing tax credits expire and cause home sales to drop after a last minute increase in home purchases by home buyers rushing to gain a tax credit advantage.

Tight Supply of Homes, New Regulations Cited as Cause for Lower Sales

A lean supply of available homes has caused rising demand for homes in 2015; an inadequate supply of homes typically causes prices to rise and sales to fall as affordability decreases. First-time buyers accounted for 30 percent of all home buyers in November, but the first-time buyers usually account for 40 percent of buyers. The national average home price rose to $220,300 in November, which represents a year-over-year increase of 6.30 percent. Home prices are rising faster than wages, which presents a major obstacle for would-be home buyers.

There was a 5.1 month supply of existing homes for sale in November, while the average supply is six months. Lawrence Yun, NAR’s chief economist, said that new regulations that increased the closing period for many home sales may have pushed more sales into December that otherwise would have closed in November.

Distressed property sales involving bank-owned homes and short sales increased in November, but this was due to financial institutions offering more homes for sale than in previous months. Analysts said that the increase in distressed sales did not represent an increase in mortgage default and foreclosure rates.

NAR forecasts that existing home sales will reach 5.20 million during 2016; this represents an increase of 2.90 percent. Upcoming reports on new and pending home sales will help provide a general picture of housing market trends as 2015 winds down.