Please enjoy this quick update on what’s happening this week in the housing and financial markets.
Despite the fact that existing home sales slowed in August, they are still considered healthy and they continue to trend in an upward direction.
- The existing home sales report came in lower than expected at a 5.31 million annual rate which is the lowest level since April.
- July was revised down but remains at an 8-year high at 5.58 million.
- Existing home sales are 6.2 percent higher than the same time last year.
- Although the growth in year-on-year sales is higher, it is currently at the lowest growth rate since February.
Home inventory increased from 4.9 months to 5.2 months.
- There continues to be a lack of available homes on the market when you compare it to the same time last year in which inventory was at 5.6 months.
- According the FHFA’s house price index home prices cooled off a little bit in the second quarter of this year.
- The good news is the latest report shows that home prices began to increase in the month of July when the index rose a greater than expected 0.6 percent.
- Prices remain above the same time last year by a spread of 5.8 percent.
- This is the largest year-on-year gain since April of last year.
The greatest gains according to the FHFA were in the West then followed by the Mountain region.
- There were two regions of the nine that are measured that declined.
- New England fell the most by 1.2 percent.
- The Mountain region by far has shown the greatest growth since the same time last year with a jump of 9.4 percent.
- New home sales are usually measured in small samples which can lead to significant movement in the data from month to month.
- For the month of August data came in far above expectations at an annual rate of 552,000.
- This is the highest rate since February 2008 and it is a significant jump from July’s pace of 537,000.
Some great news for builders is that the recent strength in new homes sales drew down available supply to 4.7 months from 4.9 months.
- This has begun to create upward pressure on pricing.
- Overall new homes sales are up 22 percent from the same time last year.
With the interest rate decline attributed to the Fed announcement to keep rates where they are, mortgage applications jumped for both refinances and purchases according to the Mortgage Bankers Association.
- Purchase apps leaped 9.0 percent and refinances soared by 18.0 percent.
Next week’s market moving reports are:
- Monday September 28th – Pending Home Sales
- Tuesday September 29th – S&P Case-Shiller HPI & Consumer Confidence
- Wednesday September 30th – MBA Mortgage Applications & ADP Employment
- Thursday October 1st – First Time Jobless Claims & ISM MFG Index
- Friday October 2nd – National Employment