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Tight inventory remains an issue in this week’s Markets in a Minute!

Tight inventory remains an issue in this week’s Markets in a Minute!
June 30, 2017 Fred Kreger



For the Week Ending June 30, 2017

Case-Shiller’s Home Price Index

In recent weeks, I have been mentioning how the Summer and Fall housing markets are being predicted, by some experts, to be far above average. We should hope they are correct on account that the early Spring market
was a rather large disappointment.


The latest Case-Shiller’s home price index increased by a rather small 0.3 percent in April. In February home prices were up by 6.0 percent from the same time in the prior year. However, for the month of March, the
year-on-year rate slipped back down to 5.7 percent. This is the first reversal in year-on-year spread in a very long time,


To the surprise of many, San Francisco home prices dropped 0.6 percent in the month. Boston was down by 0.7 percent and Cleveland declined by 1.0 percent. Not surprising is Seattle leading the country with a year-on-year
spread up by 12.9 percent.

Mortgage Bankers Association Loan Application Weekly Data


For the week ending June 23rd, purchase applications for home mortgages dropped by a seasonally adjusted 4 percent. The unadjusted level is actually 8 percent higher than the level in the same week a year ago. Refinancing
plummeted 9 percent from the prior week, with the refinance share of mortgage activity declining to 45.6 percent of all originations. (Many readers have asked me what “seasonally adjusted” data means?)


Because seasons can impact sales from one extreme to another, making seasonal adjustments to data demonstrates a more consistent approach to viewing data. Seasonal spikes, (for example more running shoes will be
sold in the summer than winter) can make it harder to see trends in a market segment versus removing the seasonality levels from the data therefore making it easier to compare from year to year.


Pending Home Sales

Even Pending homes sales for the month. May was the 3rd month in a row of decline with a jaw dropping 0.8 percent. This is in direct contrast to expert predictions of a 0.5 percent gain. The weakness in the housing
market is spread evenly throughout regions across the country. The West, usually the strongest market, declined by 1.3 percent, which was the largest decline recorded for the month. Although the data on final home sales does not always move in lock-step with
the pending home sales data, this most recent report could prove troubling for future final sales data.


Next week’s potential market moving reports are:

• Monday July 3rd – ISM Mfg Index, Construction Spending
• Tuesday July 4th – Independence Day Celebration – All Markets Closed
• Wednesday July 5th – MBA Mortgage Applications, Factory Orders, FOMC Minutes
• Thursday July 6th – First Time Jobless Claims, ADP Employment Report
• Friday July 7th – National Employment Situation


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 enjoy this quick update on what happened this week in the housing and financial markets.



Four out of five major global central banks are talking about tightening policy, including raising rates. Market reaction to the news could pressure rates
Comments this week by Fed members, including Fed Chair Janet Yellen, have investors speculating that another Fed rate increase is likely this year.
First quarter GDP growth was revised higher in May, signaling a growing economy. Higher consumer spending also provided an improved outlook.


Home prices were up 5.5% year-over-year in April. Seattle, Portland, and Dallas reported the highest year-over-year gains, according to Case-Shiller.
Pending home sales were down again in May, as tight inventory continues to be an issue. Buyer interest remains solid even with fewer choices on the market.
Although inventory has declined month-over-month for 2 years, there may be hope. NAR found that 71% of homeowners think now is a good time to sell.

Homebuyer Tip: When negotiating an apartment purchase, remember to ask your agent if the listing price is the “condo-minimum” offer
the seller is willing to take.


Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These
rate trends can differ from our own and are subject to change at any time.


Fred Kreger
American Family Funding
Certified Mortgage Consultant
NLMS # 1850 / 214640 BRE# 01215943 / 01371184
(661) 505-4311
28368 Constellation Road
Suite 398
Santa Clarita, CA



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