|For the Week Ending May 25, 2018|
New Home Sales:
The latest data on new home sales shows a decline of 1.5 percent in the month of April. This is down to an annualized rate of 662,000. This comes off the downward revision to March’s figure of 672,000. The good news in the report is that the pace of new home sales remains higher from the same time last year by 11.6 percent. The current supply of new homes is measured at 5.4 months at the current sales rate.
Existing Home Sales Report:
Existing home sales had been rising for two straight months. This trend was reversed in April with a decline in sales of 2.5 percent according to the National Association of Realtors®. The annualized rate declined from 5.60 million in March down to 5.46 million. Sales are now 1.4 percent lower than the same time last year. Low inventory continues to be the hindrance to the market. Many housing experts are stymied by the fact that the aging population is not selling in order to downsize. The reality is that anyone who is thinking of selling is having trouble figuring out where they are going to move because housing is so limited. Instead of struggling to move, many homeowners are electing to remain where they are and fix up the homes that need it.
Federal Housing Finance Agency House Price Index:
Home prices in the U.S. rose 1.7 percent in the first quarter of 2018. Compared to the same time last year, prices are up 6.9 percent. The question that remains is the trend for home prices rising beginning to slow? The reason there is increasing concern is that the latest report shows a rise of only 0.1 percent in March. This is the lowest increase seen in quite a long time.
Mortgage Application Activity:
Mortgage rates continue to creep up, and mortgage loan activity continues to inch lower. The latest release from the Mortgage Bankers Association show refinance applications declined 4.0 percent, and purchase applications dropped 2.0 percent in the week ending March 18th. Refinance applications represent only 35.7 percent of all mortgage financing.
Next week’s potential market moving reports are:
• Monday May 28th – Memorial Day, All Markets Closed
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.
|Minutes released this week from last month’s Fed meeting point to a policy rate increase in June. However, mortgage rates likely won’t be affected.|
|Inflation is showing signs of increasing, but the Fed isn’t too concerned yet. They indicated a temporary period of higher inflation would still be ok for
|The labor market continues to tighten, with unemployment at a 17-year low of 3.9%. A strong labor market is supportive of a Fed rate increase in June.|
|Sales of new single-family homes fell slightly in April but were higher than expected. Economists blame the drop on lack of inventory.|
|Home prices continue to rise, according to the FHFA Housing Price Index. However, the rate of increase has slowed compared to previous months.|
|Mortgage applications were down again last week, but refinance applications were most affected. Purchase applications were still 3% higher than a year ago.|
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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
American Family Funding
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