01
Sep
By First Rate Financial Group
Financial Reports

Case-Shiller: June Home Prices Higher

Case-Shiller: June Home Prices HigherS&P Case Shiller Home Price Indices reported new record gains for home prices in June. The National Home Price Index rose by a seasonally-adjusted annual pace of 18.60 percent as compared to May’s home price increase rate of 16.80 percent. Home prices were 41 percent higher than they were during the 2006 housing boom; home price growth was driven by high demand for homes coupled with short supplies of homes for sale.  

20-City Home Price Index Posts Month-to-Month Home Price Gain of 2 Percent

The S&P Case-Shiller 20-City Home Price Index posted a two percent gain in June as compared to May. Home prices rose by 19.10 percent on a seasonally adjusted annual basis in June;  all 20 cities included in the index reported higher home prices. Phoenix, Arizona held first place for home price growth in June with a year-over-year price gain of 29.30 percent. San Diego, California held second place in the 20-City Home Price Index with a year-over-year price gain of 27.10 percent and Seattle Washington followed with year-over-year home price growth of 25.00 percent.

All 20 cities posted higher home price gains in June than in May. Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said: “In June all 20 cities gained more in the 12 months ended in June than they did in the 12 months ended in May.”

Analysts Say Current Home Price Growth is Unsustainable

Rapidly rising home prices sidelined would-be homebuyers who expressed concerns over the fast pace of home sales, and limited choices of available homes. Cash buyers and bidding wars continued to challenge mortgage-dependent homebuyers, but low mortgage rates continued to draw homebuyers into the market.

Covid fueled an exodus from congested urban areas to less populated areas inland. Families who modified their lifestyles to include working from home and homeschooling their children needed larger homes. As workers switched from commuting to work to telecommuting, they were no longer constrained by physical proximity to their employers, but now that businesses and workplaces are reopening, it’s unknown how or if pre-covid housing and work trends will be re-established or if covid era home-based work and schooling options will expand.

In related news, the Federal Housing Finance Agency released data on sales of single-family homes owned or mortgaged by Fannie Mae and Freddie Mac. Home prices rose 17.4 percent from the second quarter of 2020 to the second quarter of 2021.FHFA reported that home prices rose 4.90 percent from the first quarter of 2021 through the second quarter of 2021, and were 1.60 percent higher for June 2021 than in May.

30
Aug
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – August 30, 2021

What's Ahead For Mortgage Rates This Week - August 30, 2021Last week’s economic reports included readings on new and existing home sales; the University of Michigan released its monthly Consumer Sentiment Index, and weekly updates on mortgage rates and jobless claims were also published.

New Home Sales and Median Home Price Rose in July

The Census Bureau reported that new homes sold at a seasonally-adjusted annual pace of 353,000 sales in July; analysts expected a pace of 350,000 new homes sold based on June’s reading of 349,000 sales of new homes. Homebuyers are buying new and existing homes at a faster pace as more homes and wider choices become available to would-be buyers. The number of new homes for sale rose 5.50 percent month-to-month and was 26 percent higher year-over-year. The median price for a new home rose to a new high of $390,500 in July.

The National Association of Realtors®  reported that July sales of previously-owned homes sold at a seasonally-adjusted annual pace of 5.99 million sales; analysts expected 5.87 million sales based on June’s sales pace of 5.83 million sales of previously-owned homes. Real estate pros were pleased with July’s increased sales pace and expected the trend to continue.

Mortgage Rates, Jobless Claims

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged one basis point higher at 2.87 percent; the average rate for 15-year fixed-rate mortgages also rose by one basis point to 2.17 percent. Rates for 5/1 adjustable rate mortgages averaged 2.42 percent and were one basis point lower. Discount points were lower across the board and averaged 0.60 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.

New jobless claims rose to 353,000 claims filed as compared to the prior week’s reading of 349,000 first-time claims filed. Analysts expected 350,000 new jobless claims to be filed last week. Continuing jobless claims dipped to 2.86 million claims filed from the prior week’s reading of 2.87 million ongoing jobless claims filed.

The University of Michigan Consumer Sentiment Index for August ticked up to an index reading of 70.3 from July’s reading of 70.2; analysts expected an August reading of  71.0.

What’s Ahead

This week’s economic reporting included readings on Case-Shiller Home Price Indices, construction spending, and Government readings on public and private-sector jobs growth and the national unemployment rate.

23
Aug
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – August 23, 2021

What's Ahead For Mortgage Rates This Week - August 23, 2021Last week’s economic news included readings from the National Association of Home Builders on housing market conditions and Commerce Department readings on housing starts and building permits issued. Weekly readings on mortgage rates and jobless claims were also released.

NAHB: August Builder Confidence Fell to Lowest Level in 13 Months

Homebuilder confidence fell to its lowest level since July 2020 according to the National Association of Home Builder’s Housing Market Index for August. The HMI reading for August was 75; analysts expected a reading of 80 based on July’s index reading of 80. Readings over 50 represent positive sentiment among homebuilders surveyed. Ongoing obstacles to builder confidence included high materials costs, supply chain issues, and lack of skilled labor. Shortages of available homes and rapidly rising home prices sidelined buyers and dampened builder confidence.

Component readings of the Housing Market Index were lower in two categories as builder confidence slipped five points to an index reading of 81 for builder confidence in current market conditions and also fell five points to 60 for builder confidence in buyer traffic in new housing developments. Builder confidence in housing market conditions over the next six months was unchanged at an index reading of 81. Regional readings for builder confidence were also lower. The Midwestern region reported an index reading of 68 and was two points lower than in July. Builders in the Northeastern region reported their confidence reading slipped one point to 74. Homebuilder confidence in the South fell three points to 82; builder confidence in the West fell two points to an index reading of 85.

New home starts reflected builder hesitancy as they slipped from a seasonally-adjusted annual rate of 1.64 million starts in June to 1.53 million starts in July. Building permits rose to a seasonally-adjusted annual pace of 1.64 million permits issued in July as compared to June’s reading of 1.59 million building permits issued.

Mortgage Rates and Jobless Claims

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages averaged 2.86 percent and were one basis point lower than for the previous week. Rates for 15-year fixed-rate mortgages averaged 2.16 percent and were one basis point higher. Rates for 5/1 adjustable rate mortgages averaged one basis point lower at 2.43 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.

Fewer jobless claims were filed last week; 348,000 new claims were filed as compared to the previous week’s reading of 377,000 initial jobless claims filed. Continuing jobless claims also dropped last week with 2.82 million ongoing claims filed as compared to the prior week’s reading of 2.90 million continuing jobless claims filed.

What’s Ahead

This week’s scheduled economic reports include reports on new and existing home sales, consumer spending, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.