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Market Update June 1

Market Update June 1
June 1, 2015 wpengine

Housing reports dominated the market this week with the Federal Housing Finance Agency Report kicking things off. The FHFA house price index rose a lower-than-expected 0.3 percent in March. The gain for FHFA is below most analysts’ expectations however the year-on-year rate in at a moderate 5.2 percent higher. This is only down 0.1 percent from February’s revised 5.3 percent.

When you look at the breakdown for the FHFA report there are considerable positives to take away from it. Seven of nine regions showed increases led by the East North Central, East South Central, and the Middle Atlantic. Unfortunately a second straight monthly decline was reported in the West South Central with New England also in the minus column. The year-on-year comparisons for the West North Central and Middle Atlantic area are the weakest at only a plus 3.2 percent and plus 3.5 percent respectively. The Mountain region came in the strongest at plus 7.2 percent followed by the Pacific at plus 6.8 percent.

Home prices continue to show solid gains according to the Case-Shiller Home Price Index. The Case-Shiller for the adjusted 20 city report showed solid gains with a 1.0 percent increase. Annualized that is 12.0 percent which is considered quite healthy for real estate appreciation. Year-on-year prices are 5.0 percent higher.

More great news for housing came from the new home sales data that showed sales increased 6.8 percent in April. Strength in the report came from the South which is the largest and a very important housing region and where sales rose 5.8 percent.

Supply of new homes rose slightly in the month to 205,000. Supply on the other hand fell to 4.8 months from 5.1 based upon current purchasing volume. Hopefully low supply will encourage builders to bring more homes on the market. Prices are mostly favorable indicating a 4.1 percent rise in the median price to $297,300 for a strong 8.3 percent year-on-year gain.

Of all the housing reports this week, pending home sales are sending off the most consistently positive signals of the housing market. Pending sales are up for four straight months. Sales jumped a much higher than expected 3.4 percent in April following an upward revised 1.2 percent gain in March. April gains were concentrated in the Northeast and Midwest with the South up slightly and the West up fractionally. Overall pending home sales are up 14.0 percent from the same time last year. Reports from real estate and mortgage professionals from around the country indicate that next month’s reports will likely will be even stronger.

This week’s potential market moving reports:

  • Monday June 1st – ISM Manufacturing Index
  • Tuesday June 2nd – Factory Orders
  • Wednesday June 3rd – MBA Applications & ADP Employment Report
  • Thursday June 4th – First Time Jobless Claims
  • Friday June 5th – National Employment Situation