Solid Gains Seen in Home Prices

Home prices continued to rise in December due in part to high demand and a shortage in homes for sale on the market. The S&P Case-Shiller 20-City Home Price Index rose 6.3 percent from December 2016 to December 2017, just below the 6.4 percent recorded in November. From November to December, prices were up 0.6 percent. David M. Blitzer, managing director and chairman of the index said, “Within the last few months, there are beginning to be some signs that gains in housing may be leveling off. Sales of Existing Homes fell in December and January. fea_chart_022718Pending Home Sales of existing homes are roughly flat over the last several months. New home sales appear to be following the same trend as existing home sales. While the price increases do not suggest any weakening of demand, mortgage rates rose from 4 percent to 4.4 percent since the start of the year. It is too early to tell if the housing recovery is slowing. If it is, some moderation in price gains could be seen later this year.”

 

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Housing Starts Jump! Rates Move Higher.

The Commerce Department reported on Friday that Housing Starts jumped 9.7% from December to an annual rate of 1.326 million units, above the 1.240 million expected. That was the highest level since October 2016 and up 7.3% from January 2017. Multi-dwelling starts, five or more units, surged 19.7% from December. Single-family starts, which account for the largest share of the market, rose 3.7% from December, up 7.6% from January 2017. Housing Starts rose in the Northeast, South and West but declined in the Midwest. 90
Fannie Mae reported on Thursday that it has increased this year’s 30-year fixed mortgage rate forecast by 30 basis points to an average of 4.40% as a result of the unexpected jump in long-term interest rates at the beginning of the year. However, Fannie Mae doesn’t expect mortgage rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth. The ongoing inventory shortages should continue to constrain sales despite positive home buying conditions.
Consumer Sentiment surged in early February as tax cuts outweighed the drop in Stock prices early in the month. The Consumer Sentiment Index rose to 99.9 from the January reading of 95.7 and above the 95.5 expected. It was the second highest level since 2004. Consumers were upbeat on the economy, rising incomes and rising employment figures. The largest proportion of households reported an improved financial situation since 2000, and expected larger income gains during the year ahead.

Solid Home Price Gains Continue

 

CoreLogic, a leading provider of data analytics, reported today that home prices, including distressed sales, jumped 7 percent from February 2016 to February 2017 due in part to high demand and limited supply across most local markets. Month-over-month, prices rose 1 percent. Looking ahead, prices are expected to rise 4.7 percent from February 2017 to February 2018fea_chart_040417_print

Existing Home Sales in 2016 Best Year in a Decade

Existing Home Sales closed out 2016 as the best year in a decade, though December’s numbers were a bit below expectations. The National Association of REALTORS® reported that sales in 2016 were 5.45 million units, above the 5.25 million in 2015 and the highest since the 6.48 million in 2006. December Existing Home Sales declined 2.8 percent from November to an annual rate of 5.49 million units, which was below the 5.55 million expected. November was revised higher to 5.65 million from 5.61 million.

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