Last week’s economic news includes several reports about housing markets.
The S&P Case-Shiller 10 and 20 city housing market indices, the FHFA House Price Index, New Home Sales and Pending Home sales reports suggest that the national housing market continues to grow, but at lower rates.
Regional readings varied and suggested that winter weather was a negative influence on affected markets.
In a press conference held on March 19 Federal Reserve Chair Janet Yellen said that severe winter weather had interfered with the Fed’s ability to get a clear reading on economic developments.
The Case-Shiller 10 and 20-City Home Price Indices for January showed year-over-year growth of 13.50 and 13.20 percent respectively. The 20-City Home Price Index reported that 12 of 20 cities reported slower rates of home price appreciation.
The 10-City Index ticked upward, but was little changed. The 20-City index posted its third consecutive month-to-month decline in home prices with a reading of -0.10 percent.
Las Vegas, Nevada led cities posting gains with a month-to-month reading of +1.10 percent, but home values remain 45 percent below peak prices achieved in August 2006.
David M. Blitzer, chair of the Index Committee at S&P Dow Jones Indices, noted that home prices were up 23 percent over their lows in 2012.
FHFA Data Reflects Slower Growth in Home Prices
The FHFA House Price Index reports home price trends for sales of homes with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. January’s data reported a year-over-year gain of 7.40 percent, which is approximately 8.0 percent below its peak in April 2007.
Month-to-month home prices varied within the nine U.S. Census regions and ranged from -0.30 percent to +1.30 percent.
FHFA reported that year-over-year, all nine regions reported gains in home prices that ranged from +3.20 percent in the Middle Atlantic region to 14.0 percent home price growth in the Pacific region.
New and Pending Home Sales Slow
According to the U.S. Department of Commerce, February sales of new homes matched projections at 440,000 as compared to January’s revised reading of 455,000 new homes sold, which was a year-over-year high.
New home sales improved by 37 percent in the Midwest, but fell in the Northeast, South and West. This suggests that while winter weather played a role, but that housing markets are cooling in general.
Rising mortgage rates and concerns over new lending standards likely contributed to the drop in sales.
Pending home sales slumped in February according to the National Association of REALTORS®.
February’s index reading of 93.9 as compared to January'ss index reading of 94.7 represented the eighth consecutive monthly drop for pending home sales and was the lowest reading since October 2011.
Pending home sales indicate future completed sales. Lawrence Yun, the NAR’s chief economist, noted that home sales delayed by winter weather may be completed this spring.
Mortgage Rates Rise, Jobless Claims Lower Than Predicted
Freddie Mac reported that average mortgage rates rose across the board last week with the rate for a 30-year fixed rate mortgage rising eight basis points to 4.40 percent. 15-year fixed mortgage rates rose 10 basis points to 3.42 percent.
Average rates for a 5/1 adjustable rate mortgage rose from 3.02 percent to 3.08 percent.
Discount points for fixed rate mortgages were unchanged at 0.60 percent and ticked upward from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages.
What’s Coming Up This Week
This week’s scheduled economic news includes Construction Spending for March, ADP payrolls for March along with Freddie Mac’s PMMS weekly report on mortgage rates and the BLS Non-Farm Payrolls report. There will be alot of news this week so stay tuned.
Have a great day and thanks for taking the time to read, comment and re-post today's blog on:
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