|For the Week Ending June 29, 2018|
Another rough week for the stock market. Losses this week have been rough on investors, however the tide seems to have settled down. On Thursday the market stabilized with the DOW rising just under 100 points, with all other exchanges rising as well. The fear of a trade war has been the main driver behind investor concerns and has driven more funds out of the market and into bonds driving down yields and interest rates slightly.
New Home Sales:
New home sales rebounded in May with an increase of 6.7%. This is on the back of April’s downward revision. The current pace of new home sales for May is 14.1% higher than the same time in 2017. Overall, year to date sales for 2018 are 8.8% higher than last year. May’s pace of home sales is the second strongest report for the current housing cycle. Surprisingly, the median home price in May was 3.3% lower than a year ago, down to $313,000.
Case-Shiller Corelogic Home Price Index:
The latest Case-Shiller data shows home prices rose 0.3% which has overall prices up 6.4% so far this year. The pace of home price growth has slowed slightly for the 3-month period ending in April. Not surprising is that Seattle, San Francisco, and Las Vegas saw double-digit annual gains. For the month of April,10 of the cities in the Case-Shiller 20-city tracker were higher than their 2006 peaks, while the other half remained below.
Pending Home Sales:
Pending home sales dipped to a 4-month low due to the lack of supply. The National Association of Realtors reported Wednesday that sales declined 0.5%. It is very clear that current homeowners are staying where they are. Not only are homes that come on the market being sold fast, now we are seeing total supply shrinking even further than before.
Adding to the market challenge is the realization that the spring market, which typically sees the most homes for sale, is now over. The likelihood of inventory growth in the coming months is extremely slim. The Midwest led the country with an increase in pending homes sales with a rise of 2.9%.
Next week’s potential market moving reports are:
• Monday July 2nd – ISM Manufacturing Index, Construction Spending
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.
|Consumer confidence was down slightly in June, suggesting economic growth may temper a bit. Economists said trade dispute concerns were to blame.|
|Some economists even think that escalation of trade tensions could tip the economy into recession. However, the Fed doesn’t seem too concerned yet.|
|The economy did slow more than previously estimated in the 1st qtr. But growth appears to have accelerated again on the back of a strong labor market.|
|New home sales climbed 6.7% in May, led by sales in the South. New home sales have risen 8.8% for the first 5 months of 2018.|
|Home values continue to rise, but at a slightly slower pace than we’ve seen recently. In April, values tracked at 6.4% annually, down from 6.5% in March.|
|Pending home sales slipped, falling for the 5th straight month in May. Tight inventory continues to get the blame.|
The early bird may get the worm, but the second mouse gets the cheese.
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
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