01
Jul
By support
Market Outlook

Case-Shiller: Home Price Growth Slower in April

Case Shiller Home Prices San Francisco Denver see Double Digit Increases

According to the Case-Shiller 20-City Home Price Index for April, home prices slowed from the March reading of 4.30 percent year-over-year to 4.20 percent year-over-year. David M Blitzer, Chairman of S&P Index Committee, said that home prices are not accelerating and characterized slower home price growth as “sustainable as compared to double-digit appreciation in home prices seen in 2013.”

The disparity between wage increases and home price growth was keeping would-be-buyers on the sidelines; so slower gains in home prices may bring more buyers into the market.

Denver Claims Top Spot for Year-Over-Year Home Price Growth

Denver, Colorado led home price appreciation in April according to Case-Shiller. The mile-high city posted a reading of10.30 percent year-over-year home price growth in April. San Francisco, California followed closely with a reading of 10.00 percent. Miami, Florida rounded out the top three price gains with a reading of 8.80 percent.

The lowest reading for year-over-year home price growth in April was posted by Washington D.C. with a reading of 1.10 percent. This was followed by Cleveland, Ohio with a reading of 1.30 percent and Boston, Massachusetts with a reading of 1.80 percent year-over-year home price growth.

Of the nine cities reporting higher year-over-year price gains, Las Vegas Nevada reported a gain of 6.30 percent in April as compared to a gain of 5.70 percent in March. Las Vegas was one of the hardest-hit housing markets during the recession.

Seattle Tops Month-to-Month Home Price Growth

Month-to-month price gains in April were led by Seattle Washington, which reported a home price gain of 2.30 percent. This reading was followed by San Francisco, California where home prices increased by 2.00 percent from March to April.

Denver rounded out the top three month-to-month price gains with a reading of 1.90 percent. Boston, Massachusetts reported the lowest month-to-month price growth with a reading of 0.30 percent followed by New York City’s reading of 0.50 percent and San Diego, California’s month-to-month gain of 0.60 percent.

In unrelated reports, the Commerce Department reported that pending home sales rose to their highest reading in more than nine years. Pending home sales rose by 10.40 percent year-over-year in May. Pending home sales are seen as a reliable indicator of future closings.

01
Jun
By support
Market Outlook

What’s Ahead For Mortgage Rates This Week – June 1, 2015

Whats Ahead For Mortgage Rates This Week June 1 2015Last week’s economic reports included the Case-Shiller Home Price Indexes, FHFA’s House Price Index and Pending Home Sales from the Commerce Department. The details:

Home Prices Dip in March, Pending Home Sales Up

According to the Case-Shiller 20-City Housing Market Index, the national reading for average home prices dipped in March. The 20-City Index moved from February’s year-over-year home price growth of 4.20 percent to an average year-over-year home price growth rate of 4.10 percent in March. San Francisco, California reclaimed the top spot for home price growth of 10.30 percent year-over-year.

The Federal Housing Finance Agency reported results that mirrored the Case-Shiller report. The FHFA House Price Index tracks purchase-only transactions for homes connected with mortgages owned or backed by Fannie Mae and Freddie Mac. The March reading for home price growth slipped to 5.20 percent year-over-year as compared to February’s reading year-over-year growth rate of 5.50 percent. Lingering winter weather conditions were seen as a contributing factor to lagging home prices.

Meanwhile, the Commerce Department provided some good news for pending home sales. April’s pending sales reading increased to 3.40 percent from the March reading of 1.20 percent. Pending home sales are considered an indicator of future closings and suggest that the peak home selling and buying season is gaining momentum.

Sales of new homes in April brought spring home sales to their highest level in seven years. New home sales rose to an annual rate of 517,000 homes sold in April as compared to expected sales of 490,000 new homes sold and March’s reading of 484,000 new homes sold. The Midwest led the charge where new home sales surged by 36.80 percent. The latest readings for pending and new home sales suggest that 2015 can expect a healthy sales activity during the spring and summer.

Mortgage Rates, Weekly Jobless Claims Rise

Average mortgage rates rose last week according to Freddie Mac. The rate for a 30-year fixed rate mortgage rose by three basis points to 3.87 percent; discount points dropped from 0.70 percent to 0.60 percent. The average rate for a 15-year fixed rate mortgage rose by six basis points to 3.11 percent with discount points lower at 0.50 percent than the previous week’s average of 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by two basis points to 2.90 percent. Discount points were unchanged at 0.50 percent.

Weekly jobless claims rose to 282,000 new claims filed as compared to expectations of 270,000 new claims and the prior week’s reading of 275,000 new claims filed. In spite of the higher reading for new jobless claims, analysts said that layoffs are few and far between. New jobless claims hit their highest level in five weeks, but remain close to a 15-year low. The four-week rolling average of jobless claims increased by 5000 new claims to a reading of 271,500 new jobless claims filed. The four-week average is considered a more reliable source for tracking unemployment trends as it evens out highs and lows that occur in weekly readings.

What’s Ahead

This week’s economic reports include Construction spending and several labor-related news topics including Non-Farm Payrolls, the National Unemployment Rate and Average Hourly Earnings. Analysts expect improving labor conditions to further bolster housing markets.

27
May
By support
Market Outlook

Case-Shiller Home Prices: San Francisco, Denver see Double-Digit Increases

Case Shiller Home Prices San Francisco Denver see Double Digit IncreasesSan Francisco, California where home prices rose 10.30 percent year over year in March, and Denver, Colorado with an even 10 percent gain in year-over-year home prices led the Case-Shiller 20-City Composite Index for March. Rounding out the top-five cities for year-over-year home price growth were Dallas Texas at 9.30 percent, Miami, Florida at 8.70 percent and Tampa, Florida with a year-over-year average gain in home prices at 8.10 percent. San Francisco’s reading for March was the first double-digit increase in home prices since last July.

The five lowest year-over-year price gains occurred in Washington, D.C. and Cleveland, Ohio tied at gains of 1.0 percent, New York City with a year-over-year gain of 2.70 percent, Minneapolis, Minnesota with a gain of 3.00 percent and Phoenix, Arizona with a year-over-year increase of 3.10 percent.

Overall, the Case-Shiller 20-City Home Price Index rose by 5.0 percent year-over-year and by 0.90 percent in March. Analysts said that while home prices remain 16 percent below their pre-recession peaks, home prices are 31 higher than the lows recorded in March 2012.

When asked if house prices are in a bubble, David Blitzer, chairman of the S&P Index Committee said that “The only way to tell if housing prices were in a bubble is looking back after it’s over.” Mr. Blitzer said that adjusted for inflation, home prices have increased on average by one percent per month since 1975, and that the current 4.10 percent monthly growth of home prices could suggest a bubble. Mr. Blitzer cautioned that home price increases are outpacing increases in personal income and national wage growth, a circumstance which reduces the pool of potential home buyers due to affordability issues.

FHFA House Price Index Posts 5.2 Percent Gain Year-Over-Year

The Federal Housing Finance Agency (FHFA) reported that as of March, prices for homes connected with Fannie Mae and Freddie Mac mortgages rose by 5.20 percent year-over-year. The agency also said that average home prices increased by 1.30 percent in the first quarter of 2015.

Home prices were 5.0 percent higher in the first quarter of 2015 than for the first quarter of 2014. This data is consistent with the unrelated Case-Shiller home price data for March. FHFA reported that home prices rose in 48 states between the first quarters of 2014 and 2015. The states with the top rates of year-over-year home price growth were:

Colorado 11.20 percent

Nevada 10.10 percent

Florida 8.70 percent

Washington 7.60 percent

California 7.50 percent

The Mountain Division led the nine Census Bureau Divisions in home price growth with a growth rate of 2.60 percent in the first quarter and a year-over-year growth rate of 6.80 percent.