Recapping last week’s real estate news includes several reports about home prices and sales from FHFA, NAR, Case-Shiller. And much more…
Huge amount of real estate and housing news last week so let’s dive in!
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 US housing market continues to grow, but at a slower pace. And we heard the same tired weather excuse again from several sources…
Case-Shiller Home Price Index
Well the big name in home price indexes came out last week. The good news from Case-Shiller is that their 10 and 20-City Home Price Indices for January 2014 increased 13.50% and 13.20% YOY. The YOY rate of home price appreciation in their 20-City Home Price Index was slower.
The 10-City Index did increase but not much. This is the 3rd consecutive month that the 20-City index decreased from the previous month. This is the longest consecutive period of sequential declines since March 2012 and the lowest YOY increase in home prices since September 2013.
One positive tidbit is that Case Shiller says home prices are up 23% over their lows in 2012. Case Shiller does expect home prices to continue to increase in 2014 just not at the pace of 2013.
FHFA House Price Index
The latest data from FHFA also shows slower growth in home prices. The FHFA House Price Index only tracks home price trends for sales of homes with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. That being said, it is still a good indicator since so many homes have mortgages owned by Fannie or Freddie.
The FHFA said that US home prices increased 7.4% YOY in January 2014. This is approximately 8% below the peak back in April 2007.
And the chart from FHFA:
New Home Sales February 2014
According to the U.S. Department of Commerce, February 2014 new home sales dropped 3% from the January 2014 level and are at a 5 month low. Even though new home sales have increased over the last two years, they are still near the bottom for previous recessions.
New home sales improved in the Midwest, but fell in the Northeast, South and West. This suggests that while winter weather played a role, housing markets are cooling in general. Rising mortgage rates and home prices may be to blame for the drop in sales.
Inventory improved steadily throughout 2013 and is up 24.3% from February 2013. The months of supply increased in February to 5.2 months from 5.0 months in January. The median sales price of a new house sold in February 2014 was $261,800, and the average sale price was $317,500.
NAR Pending Home Sales Index Decreased
Bad news came from NAR last week as they reported that their Pending Home Sales Index fell in February. Pending home sales declined for the eighth straight month in February. Pending home sales in February 2014 fell 0.8% from the previous month and are down 10.5% from the February 2013 level. This is the lowest reading since October 2011.
Mortgage Rates Rise
I posted my usual Mortgage Rate Update on Friday and all of the rates I track increased. I must point out that mortgage rates are still at historically low levels. Check out the Freddie Mac chart from Friday’s post showing how today’s rates compare to the past:
The stuff to watch this week includes:
- Construction Spending for March
- ADP payrolls for March
- Mortgage rate reports from Freddie Mac and the MBA
- And the BIGGIE: the Employment Report for March since it should have an effect on mortgage rates
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