Check out how moving price and interest rate affect affordability. Is the rate of building new homes affecting inventory? Existing Home Sales Fall 4th Straight Month; Median Sales Price Breaks $400,000

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The National Association of Realtors announced Tuesday that existing home sales decreased in May by 3.4 percent from April, the fourth consecutive monthly decline. May existing-home sales fell by 3.4 percent from April to a seasonally adjusted annual rate of 5.41 million. May also saw a decrease in single-family home sales to a seasonally adjusted annual rate of 4.80 million, down from 4.98 million in April and 7.7 percent a year earlier.

“Existing home sales have now fallen back to their pre-pandemic pace,” said Mark Vitner, Senior Economist with Wells Fargo Economics, Charlotte, N.C. “Higher prices and rising interest rates have reduced affordability.” He also added that a lack of inventory had been a significant obstacle. Nevertheless, the data indicated some progress: inventories increased to 1.16 million in May, up roughly 13 percent from April but still down 4.1 percent from a year earlier.

Median existing-home prices continue to rise. In May, they increased to $407,600, up 14.8% from the same month last year ($355,000).

MBA Weekly Survey: Applications on a Winning Streak Despite Nearly 6% Interest Rates

Mortgage Bankers Association announced that applications increased for the week ending June 17th. This is the second consecutive week of application increases after more than a month of consistent declines. It is great to see applications increasing even when mortgage rates have been rising.

The Market Composite Index climbed by 4.2 percent over the previous week on a seasonally adjusted basis. Purchase applications led to the weekly uptick, with the Index rising 8% over the previous week.

Refinances keep dropping. The Refinance Index fell 3% from the prior week and was 77% lower than it was during the same week a year prior. Refinance applications comprised 29.7% of all mortgage activity, down from 31.7% the week before. At the same time, 10.6 percent of all applications were for adjustable-rate mortgages.

U.S. Housing Market Cooling As Building Permits Tumble, Starts Fall

As rising mortgage rates add to decreased affordability for entry-level and first-time buyers, future U.S. homebuilding permits fell to a five-month low in April, suggesting the housing industry was slowing. However, the headlines number of the declines do not tell the entire story. The Commerce Department’s data on Wednesday also revealed a backlog of homes still to be built, meaning the moderation in homebuilding would be minimal.

The number of building permits fell by 3.2 percent in April to 1.819 million to the lowest level since last November. According to economists surveyed by Reuters, building permits were expected to decline to a rate of 1.812 million units, but the market is still performing better than some predictions. The single-family housing market saw the most significant drop, with permits falling 4.6 percent to 1.110 million units, the lowest level since last October.

Last month, housing starts decreased by 0.2% to 1.724 million units. Single-family housing starts, which make up the majority of new construction, fell 7.3% to 1.100 million units, which is also their lowest level since last October. Homebuilding is still supported by a record low housing supply even though overall starts have fallen for two consecutive months. The number of houses approved for construction yet to be started rose 0.7% to an all-time high of 288,000 units in April. The backlog for single-family dwellings was at its highest level since June 2006.

Next week’s potential market moving reports are:

  • Monday, June 27th – Pending Home Sales Index
  • Tuesday, June 28th – S&P Case-Shiller U.S. Home Price Index
  • Wednesday, June 29th – Gross Domestic Income Revision (SAAR)
  • Thursday, June 30th – Initial Jobless Claims, Continuing Jobless Claims, PCE Inflation
  • Friday, July 1st – Construction Spending, ISM Manufacturing Index

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.

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Fannie Mae’s November Home Purchase Sentiment Index reports that the US housing market remains solid despite rising economic negativity to its highest level in a decade

MBA Weekly Applications Survey December 8, 2021: Rates Drop; Refis Up

The Mortgage Bankers Association said Wednesday in its Weekly Mortgage Applications Survey for the week ending December 3rd that mortgage interest rates declined for the first time in four weeks, spurring an increase in refinancing activity. 

The Market Composite Index gained by 2% over the previous week on a seasonally adjusted basis. The unadjusted Refinance Index rose 9% from the prior week, and the refinance percentage of total mortgage applications grew to 63.9 percent from 59.4 percent the week before. 

The seasonally adjusted Purchase Index fell by 5% from the week prior. The FHA’s percentage of total applications grew to 9.9% from 8.9% the previous week. The share of overall applications submitted by veterans increased to 10.7%.

Home Purchase Sentiment Unfazed By Negative Economic SentimentM

Fannie Mae’s November Home Purchase Sentiment Index reports that the US housing market remains solid despite rising economic negativity to its highest level in a decade (HPSI).

In November, the index fell 0.8 points to 74.7, with 74 percent of consumers believing now is a good time to sell a property and 29 percent considering it is an excellent time to buy. The HPSI was down 5.3 points from the same time last year.

However, any bad economic sentiment has yet to convert into a meaningful decline in actual demand for purchase mortgages. According to Mark Palim, Fannie Mae’s deputy chief economist, most of the pessimism about the economy’s direction is likely due to inflation. He also added that “An even greater share of consumers (particularly those with low and moderate incomes) expect mortgage rates to go up in the next 12 months, which may be a signal that some households plan to pull-forward their home purchase plans; despite growing economic apprehension.” 

Weekly Jobless Claims Fall To 184,000,  Lowest Level In Over 52 Years

The Labor Department said Thursday that weekly unemployment claims fell to a new 52-year low last week as the US jobs market emerges from its pandemic-era rut.

The week ending December 4th saw 184,000 initial unemployment insurance claims, the lowest since September 6, 1969, when 182,000 were filed. Continuing claims increased 38,000 to slightly under 2 million, a week below the headline number. The four-week moving average for continuing claims, which smooths out weekly volatility, fell by 54,250 to 2.03 million.

Next weeks potential market moving reports are:

  • Monday, December 13th – No Report
  • Tuesday, December 14th – Small Business Index
  • Wednesday, December 15th – Home Builders’ Index, Federal Reserve FOMC Announcement
  • Thursday, December 16th – Initial Jobless Claims, Building Permits, Housing Starts
  • Friday, December 17th – No Report

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047

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According to a department head at ADP, private-sector job creation increased in October due to a surge in hiring in the hospitality sector.

Weekly Jobless Claims Better than Expected

Last week, the jobless situation in the United States improved once further, with initial unemployment insurance claims falling to a pandemic-era low.

On Thursday, the Labor Department said that initial jobless claims fell to 269,000 for the week ending October 30th, down 14,000 from the previous week and better than the Dow Jones forecast of 275,000.  The dip in filings coincides with a rollback of special programs implemented during the crisis, with the overall number of people getting benefits from all programs falling by 157,731 to 2.67 million.

Continuing claims fell 134,000 to a little over 2.1 million, a week behind the headline number.  All of the jobless figures have been at their lowest levels since March 14, 2020.

Refis Fall to Nearly 2-Year Low

The Mortgage Bankers Association stated in its Weekly Mortgage Applications Survey for the week ending October 29th that mortgage rates declined last week, but so did mortgage applications, particularly refinance applications

On a seasonally adjusted basis, the Market Composite Index fell 3.3 percent from the previous week. The Index fell 4% from the prior week on an unadjusted basis. The unadjusted Refinance Index fell 4%, while the refinance share of total mortgage applications dropped to 61.9 percent from 62.2 percent – both from the previous week. The seasonally adjusted Purchase Index fell 2% from the last week to its lowest point since January 2020. Compared to last week’s numbers, the FHA’s portion of overall applications fell to 9.2% from 10.4%; the VA’s portion fell to 9.9% from 10.6%, and the USDA’s share remained steady at 0.5 percent.

Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting, said purchase activity continues to be held back by high prices and low for-sale inventory. However, current applications levels still point to healthy housing demand. “MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022,” he said.

Companies Add 571,000 Jobs in October

According to ADP, a payroll processing firm, private-sector job creation increased in October due to a surge in hiring in the hospitality sector. Companies added 571,000 jobs in October, exceeding the Dow Jones’ forecast of 395,000 and coming in just ahead of September’s downwardly revised 523,000. It was the best job-seeking month since June.

The leisure and hospitality industry witnessed an increase of 185,000 jobs, despite being well below its pre-pandemic employment level. The sector is viewed as a measure of the economy’s recovery, which slowed over the summer due to a surge in the Covid delta version and a significant supply line clog.  Overall, 458,000 new jobs were created as a result of the sector’s expansion.

Meanwhile, 88,000 jobs were added in professional and business services, 78,000 in trade transportation and utilities, and 56,000 in education and health services. Construction and manufacturing created 54,000 and 53,000 jobs in the goods-producing sector, which added 113,000 jobs.

Next weeks potential market moving reports are:

  • Monday, November 8th – No Report
  • Tuesday, November 9th – NFIB Small-Business Index
  • Wednesday, November 10th – Initial Jobless Claims, Continuing Jobless Claims; Federal Budget
  • Thursday, November 11th – No Report
  • Friday, November 12th – Job Openings, Five-Year Inflation Expectations

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047

 

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