Please enjoy this quick update on what happened this week in the housing and financial markets.
This was a great week for housing news.
- The real estate market is the strongest it has been since 2007.
- On Wednesday the Existing Home Sales report came in much stronger than expected.
- Existing home sales increase 3.2 percent for the month of June to a higher-than-expected annual rate of 5.49 million.
- This is the best number we have seen since February 2007.
- June’s gain comes on top of May’s upward revised sales of 4.5 percent.
- Sales compared to the same time last year are up a very strong 9.6 percent
- This points to further home-price appreciation in the coming months which is up by 6.5 percent.
Part of what is giving the lift to home prices is that distressed sales made up only 8 percent of June’s total sales.
- This is the lowest amount on record since tracking started.
- Tight inventory supply continues to play a factor in driving up home prices as well.
- The current level of inventory is 5.0 months at the current sales rate which is lower than May’s 5.1 months and April’s 5.2.
- Compared to last June’s inventory of 5.5 months it is clear the current tight supply will maintain upward pressure on prices.
What is interesting is that first-time buyers are not the main driver of what is happening in the market.
- First timers made up only 30 percent of total sales.
- It is expected that rates will increase modestly in the fall if the Fed sticks to their plan.
- Next week there two more significant real estate reports due out which may further bolster the positive perspective on housing.
The Federal Housing Finance Agency report on home prices reinforces the other reports in that home prices are rising.
According to the FHFA, home prices are up a solid 5.7 from the same time last year.
- This is the best rate of increase year-over-year since April 2014.
Next week’s potential market moving reports:
- Monday July 27th – Durable Goods Orders
- Tuesday July 28th – S&P Case-Shiller House Price Index
- Wednesday July 29th – MBA Applications and Pending Home Sales
- Thursday July 30th – First Time Jobless Claims and GDP
- Friday July 31st – Consumer Sentiment
As your mortgage 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 feel free to reach me at (661) 505-4300.