South Orange County Blog from Bob Phillips

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

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.

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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.

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What’s Ahead For Mortgage Rates This Week – Sept 2, 2014

Whats-Ahead-Mortgage-Rates-6Last week’s economic news included several reports related to housing. The Case-Shiller and FHFA reports for June showed a further slowing in home price growth. New home sales for July fell short of the expected reading, but pending home sales exceeded expectations. The details:

Case-Shiller, FHFA: June Home Price Growth Slows

The Case-Shiller 10 and 20-City Home Price Index for June moved from May’s year-over-year reading of 9.40 percent growth to 8.10 percent in June. Home prices grew by 1.00 percent on a month-to-month basis in June as compared to May’s reading of 1.20 percent.

Demand shrank due to increasing inventories of available homes and stricter mortgage standards. For the first time since 2008, each of the 20 cities tracked showed slowing growth in home prices. Home prices are about 17 percent lower than their pre-recession peak in 2006. Case-Shiller also reported that the national median home price rose by 2.90 percent year-over-year to $269,800.

Analysts said that slower gains in home prices coupled with increasing confidence among home builders signals a return to more normal housing market conditions.

FHFA reported that home prices for purchase transactions grew by 0.20 percent less than May’s year-over-year reading of 5.40 percent. FHFA reports on properties connected with mortgages owned or backed by Fannie Mae and Freddie Mac.

New Home Sales Slip in July, Pending Home Sales Gain

The Department of Commerce reported that New Home Sales missed expectations for July with a reading of 412,000 new homes sold on seasonally adjusted annual basis. June’s revised reading was 422,000 new homes sold, and analysts expected new home sales at a rate of 430,000 in July against June’s original sales pace of 406,000. Three out of four regions posted slower growth rates for new home sales, with the South posted a gain in new home sales. New home sales were 12.30 percent higher than one year ago.

Analysts said that improving labor market conditions and the slower rate of home price growth are positive trends for housing markets as more home buyers can afford to buy homes. Mortgage rates are approximately one-half percent lower than last year, which also increases affordability.

Pending home sales exceeded expectations for July to an 11 month high, which may ease concerns over July’s dip in new home sales. The National Association of REALTORS® Pending Home Sales Index rose to 105.9 in July as compared to June’s index reading of 102.5. Homes under contract increased from a negative reading of -1.30 percent in June to July’s reading of +3.30 percent. Pending home sales are considered a strong indicator of future home sales.

Mortgage Rates Mixed. Consumer Confidence Jumps

Freddie Mac reported that average mortgage rates were little changed. The rate for a 30-year fixed rate mortgage was unchanged at 4.12 percent. 15-year mortgages had an average rate of 3.25 percent which was an increase of two basis points over the previous week. The average rate for a 5/1 adjustable rate mortgage moved from 2.95 percent to 2.97 percent. Discount points were unchanged at 0.50, 0.60 and 0.50 percent respectively.

Two gauges of U.S. consumer confidence indicated stronger levels of consumer confidence in the economy. The Consumer Confidence Index rose to 92.4 in August from July’s reading of 91.9 and exceeded a lower expectation of 88.5. The University of Michigan’s Consumer Sentiment Index rose to 82.5 against July’s reading of 79.2 and the expected reading of 80.1. Increasing consumer confidence suggests that as more consumers become comfortable with current economic conditions, they may be more confident about buying homes.

What’s Coming Up

Next week’s economic reports include construction spending and the Fed’s Beige Book Report. The Bureau of Labor Statistics will also release Non-farm Payrolls and the National Unemployment Rate for August. No activity is scheduled for Monday due to the Labor Day holiday.

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S P Case-Shiller Home Price Index: May Home Prices Rise

S&P Case-Shiller Home Price Index: May Home Prices RiseMay home prices rose in all 20 cities tracked by the S&P Case-Shiller 20 City Home Price Index. This was the second consecutive month in which all cities posted gains.

On average, national home prices rose by 1.10 percent in May as compared to April’s reading. Year-over-year, home prices rose, but at a slower rate of 9.39 percent in May as compared to 10.80 percent year-over-year for April.

Nevada, Florida and California Cities Post Highest Gains

Cities posting the highest year-over-year price gains in May included Las Vegas, Nevada at 16.90 percent, San Francisco, California at 15.40 percent, Miami, Florida at 13.20 percent. San Diego and Los Angeles, California reported home price growth rates at 12.40 and 12.29 percent respectively.

According to the 20-City Index, home prices are 18 percent below their peak reached in mid-2006, but are 27 percent higher as compared to March 2012 lows.

Pending Home Sales Decline in June

More evidence of sluggish home sales was reported for June. The National Association of REALTORS® reported that pending home sales dropped by 1.10 percent in June. This was a surprise as compared to May’s month-to-month gain of 6.00 percent for pending sales.

Several factors were cited as contributing to slower home sales; higher home prices, stagnant wage growth, higher mortgage rates and stringent loan requirements were seen as obstacles for home buyers. Pending home sales are an indicator of future closings and mortgage activity. Approximately 80 percent of purchase contracts signed sales completed within 60 days.

FHFA House Price Index: Home Price Growth Slips in May

FHFA, the agency that oversees Fannie Mae and Freddie Mac, reported that home prices grew by 0.40 percent in May to a seasonally-adjusted year-over-year rate of 5.50 percent as compared to April’s year-over-year reading of 5.90 percent. FHFA’s House Price Index is based on sales of homes connected with Fannie Mae and Freddie Mac mortgages.

On a positive note, the reading for the Consumer Confidence Index jumped from 85.20 in June to 90.90 in July. Expanding consumer confidence suggests that more families may decide to transition from renting to owning their homes, and that homeowners may feel confident enough to move up to larger homes.

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What’s Ahead For Mortgage Rates This Week – July 28, 2014

Home cooling costsLast week’s economic news brought several housing-related reports, which indicated varying results in terms of gauging the economic recovery. FHFA reported slower growth of home prices associated with Fannie Mae and Freddie Mac mortgages, but sales of existing homes as reported by the National Association of REALTORS® surpassed expectations and May’s reading. Sales of new homes slumped to their lowest level in three months. Weekly jobless claims were lower than expected and also lower than for the prior week.

FHFA Home Prices Grow at Slower Rate, Existing Home Sales Higher than Expected

The Federal Housing Finance Agency (FHFA) reported that the average sale price of homes associated with mortgages owned or backed by Fannie Mae and Freddie Mac grew by.40 percent in May with year-over year growth of 5.90 percent. While national home price readings continue to rise, they are doing so at a slower pace since 2013’s rapid appreciation of average home prices.

Sales of previously owned homes reached their highest level in eight months in June. Existing home sales surpassed expectations and May’s reading in June, with sales of pre-owned homes at a seasonally adjusted annual rate of 5.04 million units. Analysts forecasted sales of existing homes at 5.00 million against May’s reading of 4.91 million existing homes sold.

New Home Sales Fall Short in June

New home sales did not achieve the expected volume for June. The reading of 406,000 new homes sold was less than the expected reading of 475,000 new homes sold. Projections were based on the original May reading of 504,000 new homes sold, but this was downwardly revised to 442,000 new homes sold in May. Builders were said to be cautious about over-extending themselves are focused on new home construction in high-demand areas where home prices are higher. Homes are less affordable in such areas, which impacts lower sales volume.

Freddie Mac: Mortgage Rates Steady for 30-year FRM

The average rate for a 30-year fixed rate mortgage was unchanged at 4.13 percent with average discount points also unchanged at 0.60 percent according to Freddie Mac’s weekly survey of mortgage rates. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.26 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points higher at 2.99 percent with discount points ten basis points higher at 0.50 percent.

Weekly Jobless Claims Lowest since 2006

A major consideration for home buyers is stable employment. Recent reports suggest that the labor market is expanding; the Weekly Jobless Claims report continued this trend with a lower than expected reading of 284,000 new jobless claims filed against expectations of 310,000 new claims and the prior week’s reading of 303,000 new jobless claims. Analysts found the declining number of new jobless claims consistent with lower unemployment rates, but cautioned that sustained weekly jobless claims readings lower than 300,000 are more consistent with a national unemployment rate of 5.00 percent or less.

What’s Ahead

This week’s scheduled economic news will add further insight to housing market trends with the release of Pending Home Sales for June and the Case-Shiller Home Price Index report for May. The Bureau of Labor Statistics will also release July’s Non-Farm Payrolls report and National Unemployment report. The Federal Reserve is set to release its customary statement in the aftermath of the Federal Open Market Committee (FOMC) meeting that concludes on Wednesday.

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What’s Ahead For Mortgage Rates This Week – June 2, 2014

Whats-Ahead-Mortgage-Rates-6Last week’s economic news was fairly quiet due to the Memorial Day holiday on Monday and no scheduled news released on Wednesday.

Home Prices Post Modest Gains, But Growth Rate of Home Prices Slows

Tuesday’s release of the S&P Case-Shiller Home Price Index for March showed that home prices are edging up, but at a slower pace than last year. Home prices increased by 12.40 percent year-over-year as compared to February’s reading of 12.90 percent year-over-year.

Analysts expected prices to fall as construction picks up and more homes are listed for sale. Lower demand due to strict mortgage lending standards and high home prices continued to keep many moderate-income and first-time home buyers on the sidelines.

FHFA Reports Home Prices Increased By Over 6 Percent

FHFA, the agency that oversees Fannie Mae and Freddie Mac also released its home price index for properties connected with Fannie Mae or Freddie Mac owned or guaranteed loans. As of March, FHFA reported that home prices increased by 6.50 percent year-over-year as compared to February’s year-over-year reading of 6.90 percent.

Consumer confidence rose by 1.30 percent for May with a reading of 83.0, which matched expectations.

Last Thursday’s news included the weekly Jobless Claims report, which showed 22,000 fewer jobless claims than expected with a reading of 300,000 new jobless claims reported. Thursday’s reading was also lower than the prior reporting period’s reading of 327,000 new jobless claims filed.

The four-week rolling average of jobless claims also showed improvement with 11,250 fewer claims filed and an average reading of 311,500 new weekly jobless claims filed. This was the lowest number of jobless claims filed since August 2007. Analysts look to the four-week rolling average as more accurate than the weekly readings, which can be volatile.

U.S. jobs have increased by 200,000 jobs per month over the last three months reported.

Pending Home Sales Up for Second Consecutive Month

Pending home sales in April rose by 0.40 percent from the March reading of 97.4 to 97.8. The April reading was the highest for pending home sales since November. Pending home sales provide an estimate of future home sales.

Lower mortgage rates likely supported expanded home sales. Freddie Mac reported that the average rate for a 30-year fixed rate mortgage was 4.12 percent, a drop of two basis points from last week. The rate for a 15-year fixed rate mortgage fell by four basis points to 3.21 percent.

The average rate for a 5/1 adjustable rate mortgage was unchanged at 2.96 percent. Discount points were unchanged at 0.60 for a 30-year fixed rate mortgage and 0.50 percent for a 15 year mortgage. Discount points dropped from 0.40 to 0.30 percent for a 5/1 adjustable rate mortgage.

What’s Ahead

In addition to construction spending for April, this week’s economic news includes several reports that can provide insight about employment and consumer spending.

News events include Motor Vehicle Sales for May, The Fed’s Beige Book report, and Thursday’s usual release of Freddie Mac’s average mortgage rates and weekly Jobless Claims. Non-farm Payrolls and the national unemployment rate for May are also scheduled for release

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Existing Home Sales Report Shows Highest Home Inventory Since January 2012

Posted in Existing Home Sales, FHFA, Housing Analysis, Mortgage Rates, New Home Sales, Real Estate Trends by southorangecounty on August 27, 2013

Existing Home Sales: Highest New Home Inventory Since January 2012The National Association of REALTORS reported that existing home sales for July came in at 5.39 million on a seasonally adjusted annual basis. July’s reading exceeded both expectations of 5.21 million existing homes sold and June’s reading of 5.06 million homes sold.

This suggests good news for home buyers who’ve been constrained by limited supplies of homes for sale.

As home prices continue increasing in many areas, more homeowners are likely to list their homes for sale. Existing home sales for July rose by 6.80 percent year-over-year.

The Federal Housing Finance Agency Home Price Index reported a 7.70 percent year overyear increase in prices for homes financed by Fannie Mae or Freddie Mac.

This reading was slightly higher than May’s year-over-year reading of a 7.60 percent increase in home prices.

New Home Sale Inventories Also Growing

New home sales for July dropped by 13.40 percent to a seasonally adjusted annual reading of 394,000; this was lower than expectations of 485,000 new homes sold, but this expectation was based on June’s original reading of 497,000 new homes sold. June’s reading has been adjusted to 455,000 homes sold, which likely would have resulted in a lower expectation.

New home sales were lower in all four U.S. regions:

-16.1 percent in the West

-13.4 percent in the South

-12.9 percent in the Midwest

– 5.7 percent in the Northeast

While this isn’t great news for developers and home builders, supplies of new homes for sale jumped from a 4.30 month supply of new homes in June to a 5.20 month inventory of available new homes in July. This was the highest inventory of available new homes since January 2012.

Monthly New Home Sales Continue Upward Trend

Month to-month sales of new homes tend to be volatile, but July’s year-over-year home sales were 6.80 percent above new home sales in July 2012.

Higher mortgage rates likely stifled sales, but slower sales would increase inventories of available homes. More homes available would help ease constraints on buyers and level then playing field for home buyers who have been competing for few homes in strong seller’s markets.

Rising mortgage rates could continue, especially if the Federal Reserve begins tapering its $85 billion in monthly bond purchases, a program known as quantitative easing. The Fed has announced that it may start reducing the QE program before year-end.

When QE purchases are reduced, securities prices can be expected to fall due to less demand, and mortgage rates can be expected to rise.

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Existing Home Sales: Second Highest Level Since 2009

Existing Home Sales Second Highest Level Since 2009

According to the National Association of REALTORS®, national sales of existing homes in June came in at 5.08 million.

Summer typically produces the highest prices for existing homes sold, as families seeking larger homes frequently move during summer months.

The June inventory of existing homes improved by 1.90 percent to 2.19 million homes or a 5.20 month supply. June’s number of available homes was 7.60 percent lower than in June 2012.

The shortage of available homes has been causing buyers to turn from existing homes to new homes in areas where both available homes and/or land for new construction are in short supply.

Average Home Prices Continue Their Climb Nationally

So the news of more existing homes for sale is good news for home buyers and housing markets that have been held back by an excess of buyers seeking a short supply of available homes.

NAR chief economist Lawrence Yun noted that inventories of existing homes are expected to “broadly favor sellers and contribute to above-normal price growth.”

This trend was supported by June’s national average price for existing homes at $214,200, which represented a year-over-year increase of 13.5 percent. Rising home prices and mortgage rates continue creating financial challenges for first-time buyers and others seeking affordable home prices and mortgage loans.

Distressed home sales were down from 18 percent in May to 15 percent in June; this is the lowest market share since tracking began in 2008. June sales of distressed homes were significantly lower than in June 2012’s reading of 26 percent of existing homes sold.

The National Association of REALTORS® noted that falling levels of distressed sales are contributing to higher prices for existing homes.

FHFA Reports Home Prices Rise In May

The Federal Housing Finance Agency (FHFA) reported Tuesday that prices for homes financed by Fannie Mae and Freddie Mac rose by 0.70 percent in May as compared to April’s downwardly revised 0.50 percent increase in home prices.

According to the FHFA Housing Price Index (HMI), home prices were up by 7.30 percent year-over-year in May, and are roughly equal to home prices reported for January 2005. May’s home prices remained 11.20 percent below peak prices reported in April 2007.

May’s FHFA data demonstrated steady growth of home prices for all nine census divisions on a year-over-year basis with home prices increasing from 2.70 percent to 15.80 percent in May.

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