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Good News! Existing Home Sales, FHFA Home Prices Increase

July 23, 2015 by Kay Monigold

Good News Existing Home Sales FHFA Home Prices IncreaseHousing markets show continued signs of strengthening according to reports released on Wednesday. The National Association of Realtors® reported that sales of pre-owned homes rose to 5.49 million in June as compared to May’s revised reading of 5.32 million pre-owned homes sold and expected sales estimated at 5.42 million sales. Expectations were based on May’s original reading of 5.35 million sales. June’s reading was the highest since February of 2007. Readings for existing home sales are calculated on a seasonally adjusted annual basis.

Buyers Gain Confidence in Labor Markets, Rush to Beat Rate Hikes

Lawrence Yun, chief economist for the National Association of Realtors® said that buyers may be influenced by rising mortgage rates and encouraged by improving job markets. Analysts expect the Federal Reserve to raise its target federal funds rate this fall, which means that mortgage rates along with consumer lending rates will rise.

The national median home price rose by 6.50 percent annually to $236,400, also a record reading.

While this news paints a rosy picture for housing markets, challenges remain. Strict mortgage standards are an obstacle for first time and moderate income buyers as well as for buyers with less than stellar credit scores. While construction of new homes is increasing, the majority of projects are apartment complexes. 41 percent of housing starts in June were multi-family projects with five or more units. This data falls in line with stricter mortgage standards and a trend for millennials, an expected group of first-time homebuyers, preferring to rent in large cities rather than moving to suburban areas.

FHFA House Prices Rise in May

The Federal Housing Finance Agency (FHFA) reported that home prices associated with mortgage loans owned or backed by Fannie Mae and Freddie Mac was unchanged from April’s revised reading of 0.40 percent month-to-month home price growth. April’s month-to-month reading was originally reported at 0.30 percent. FHFA home prices were up 5.70 percent year-over-year in May.

FHFA reported that year-over-year home price growth was positive in all nine census divisions, with the lowest growth rate of 0.90 percent in the Mid Atlantic division and the highest growth rate of 8.40 percent in the Pacific division.

Filed Under: Market Outlook Tagged With: Existing Home Sales, FHFA, National Association of REALTORS

What’s Ahead For Mortgage Rates This Week – June 29, 2015

June 29, 2015 by Kay Monigold

What's Ahead For Mortgage Rates This Week - June 29, 2015Last week’s economic news was largely positive as both new and existing home sales beat expectations. FHFA reported that home price growth held steady in May, while weekly jobless claims edged up, but were lower than expected.

New and Existing Home Sales Exceed Expectations

According to the Commerce Department, new home sales reached 546,000 on an annual basis for May. This surpassed expectations for 525,000 new homes sold and April’s revised reading of 534,000 new homes sold. Expectations were based on the original reading of 517,000 new homes sold in April.

Existing home sales rose by 5.10 percent in May to a seasonally-adjusted annual reading of 5.35 million sales and hit their highest level in five and a half years. The National Association of Realtors reported that this was the fastest pace of sales for previously-owned homes since November 2009. Expectations were based on an April’s original reading of 5.04 million sales, which was later revised to 5.09 million existing homes sold.

With wages and hiring picking up, more first-time buyers are expected to enter the market. Economists said there are signs that mortgage credit is becoming more available as lenders gain confidence in stronger economic conditions. A larger supply of available homes was also cited as driving sales of previously owned homes higher.

FHFA: Home Prices Show Steady Growth in May; Mortgage Rates Mixed

The Federal Finance Housing Agency (FHFA), the agency that oversees Fannie Mae and Freddie Mac, reported that home prices related to mortgages owned by Fannie Mae and Freddie Mac held steady with a growth rate of 5.30 percent year-over-year reported in May. This was the same year-over-year home price growth rate that the agency posted in April.

Freddie Mac reported mixed developments for mortgage rates. The average rate for a 30-year fixed rate mortgage rose by two basis points to 4.02 percent; the average rate for a 15-year fixed rate mortgage fell by two basis points to 3.21 percent and the average rate for a 5/1 adjustable rate mortgage also fell by two basis points to 2.98 percent. Average discount points were 0.70, 0.60 and 0.40 percent respectively.

Last week’s economic reports ended on a high note with June’s Consumer Sentiment Index reporting a reading of 96.1 as compared to expectations of 94.6 and May’s reading of 94.6. All in all, last week’s economic news provided further indications of stronger economic conditions that should provide the confidence to ease mortgage credit requirements and enable more first-time buyers to purchase homes.

What’s Ahead

This week’s economic reports include date on pending home sales, Case-Shiller’s Home Price Index reports and construction spending. The Bureau of Labor Statistics will also release the monthly Non-Farm Payrolls report and National Unemployment reports. No economic news is scheduled for Friday, July 3 due to the Independence Day holiday.

Filed Under: Market Outlook Tagged With: FHFA, Freddie Mac, Home Sales

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Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Ron MartinRon Martin
Residential Mortgage Loan Originator

NMLS#316821

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

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