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Case-Shiller: Home Prices Continue Rising in November

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Case-Shiller: Home Prices Continue Rising in November

Case-Shiller Home Price Indices reported a year-over-year national home price gain of 9.50 percent for November 2020. Home prices continued to grow in response to high demand for homes and homeowner relocations in response to the covid-19 pandemic. Inventories of pre-owned homes remained low. Home prices rose at a slower pace in November but remained strong in most areas.

20-City Home Price Index Reports Home Price Gains in 19 of 20 Cities

November’s edition of the 20-City Home Price Index reported the highest year-over-year home price gain of 13.80 percent in Phoenix, Arizona, which held first place for the 18th consecutive month. Seattle, Washington reported year-over-year home price growth of 12.70 percent, and San Diego, California held third place with year-over-year home price growth of 12.30 percent. Home prices rose 1.50 percent from October to November.

Lower numbers of mortgage applications indicated that demand for homes may be slowing, but analysts expected demand for homes to continue driving home prices up. Factors contributing to slowing home sales include affordability and less inclination to relocate as businesses and employers reopen. Low inventories of available pre-owned homes limited prospective buyers’ choice of homes; home builders faced rising materials and labor costs that impact their ability to produce affordable homes.

FHFA Reports Home Price Growth Exceed Post-Recession Pace

The Federal Housing Finance Agency reported that prices of single-family homes owned or financed by Fannie Mae and Freddie Mac grew by one percent between October and November; home prices were up by 11 percent year-over-year. November was the sixth consecutive month for home price growth reported by FHFA. Data supplied by FHFA is based on house purchases and does not include refinancing transactions. 

Dr. Lynn Fisher, Deputy Director of FHFA’s Division of Research and Statistics, said “House prices have risen by at least one percent for six consecutive months. The acceleration has been slowing, but annual gains now outpace the prior housing boom. Current conditions can be explained by fundamentals including low rates and tight housing supply, which have been  intensified by the pandemic.”

Year-over-year home price growth within the nine federal census divisions ranged from 0.30 percent in the West South Central Division to 14.00 percent growth in the Mountain Division. Home price growth in the mountain west continued to grow as homeowners in costly and congested coastal areas moved to more affordable neighborhoods in cities including Phoenix, Arizona,  and Boise, Idaho.

What’s Ahead For Mortgage Rates This Week – January 19, 2021

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What's Ahead For Mortgage Rates This Week - January 19, 2021Last week’s economic reports included readings on inflation, retail sales, and a speech by Federal Reserve Chair Jerome Powell. Weekly readings on mortgage rates and jobless claims were also released.

 Inflation Rises as Retail Sales Fall, Fed  Says Current Monetary Policy Won’t Change

The Consumer Price Index rose to 0.40 percent in December as compared to November’s reading of 0.20 percent. The CPI measures inflation and the Core CPI measures inflation without the volatile sectors of food and fuel. December’s Core CPI reading fell to a rate of 0.10 percent growth from November’s reading of 0.20 percent.

Retail sales were dampened by the coronavirus, but December’s negative reading of -0.70 percent sales was lower than the    -1.40  percent rate reported in November.  December sales excluding the automotive sector were -1.40 percent lower in December as compared to November’s reading of -1.30 percent.

Federal Reserve Chair Jerome Powell dispelled fears of rising inflation and said that the Fed’s Federal Open Market Committee will not raise its current federal interest rate range of 0.00 to 0.25 percent any time soon. Chair Powell also said that the Fed would not decrease its purchase of Treasury Bonds as a further measure to stabilize the economy.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by 14 basis points to 2.79 percent. Rates for 15-year fixed-rate mortgages averaged 2.23 percent and were seven basis points higher. Rates for 5/1 adjustable rate mortgages rose by 37 basis points to 3.12 percent on average. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for  5/1 adjustable rate mortgages.

First-time jobless claims rose to 965,000 claims filed last week as compared to the prior week’s reading of 784,000 initial claims filed. Ongoing jobless claims also rose with 5.27 million claims filed as compared to the prior week’s reading of  5.07 million continuing claims filed.

The University of Michigan’s Consumer Sentiment Index was lower in January with a reading of 79.2.  Analysts expected an index reading of 79.2 based on the December reading of 80.7.

What’s Ahead

This week’s scheduled economic reports include the National Association of Home Builder’s Housing Market Index and reports from the Commerce Department on housing starts, building permits issued. Sales of pre-owned homes will also be reported along with weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – January 4, 2021

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What's Ahead For Mortgage Rates This Week - January 4, 2021Last week’s economic news included reports from Case-Shiller Home Price Indices and data on pending home sales. No weekly data on jobless claims were released due to the New Year holiday, but Freddie Mac did issue its weekly report on average mortgage rates.

Case-Shiller Reports Home Prices Reached 6-Year High In October

U.S. home prices reached their highest level in six years according to Case-Shiller’s National Home Price Index. Home prices rose by 8.40 percent year-over-year in October as compared to September’s home price growth reading of 7.00 percent. Demand for homes rose during the Covid pandemic as families moved from congested urban areas to less crowded suburbs and rural areas. Ongoing shortages of available homes fueled rising home prices as mortgage rates fell to record lows. 

Case-Shiller’s 20-City Home Price Index showed a 7.90 percent year-over-year growth rate in October as compared to September’s home price growth rate of 6.60 percent.  Phoenix, Arizona led the 20-City Index with a year-over-year home price growth rate of 12.70  percent. Seattle, Washington posted a year-over-year home price growth rate of 11.70 percent, and San Diego, California followed closely with a year-over-year home price growth rate of 11.60 percent.

Cities posting the lowest home price growth rates in October were New York, New York with 6.00 percent home price growth; Chicago, Illinois posted year-over-year home price growth of 6.30 percent and Las Vegas Nevada home prices grew by 6.40 percent year-over-year,

Analysts did not expect home price growth to slow any time soon. Relocation and the anticipated retreat of the pandemic as vaccines become available were expected to fuel home price growth as the economy improves.

Pending Home Sales Fall in November, Average Mortgage Rates Mixed

The National Association of Realtors® reported  -2.60 percent a drop in pending home sales in November; this was the third straight month of falling pending home sales. Pending home sales are sales for which purchase contracts are signed but have not closed.

Mortgage Rates Mixed

Freddie Mac reported mixed average mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose by one basis point to 2.67 percent; the average rate for 15-year fixed-rate mortgages dropped by two basis points to 2.17 percent and rates for 5/1 adjustable rate mortgages dropped by eight basis points to 2.71 percent on average. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, minutes from the Fed’s FOMC meeting, and payroll data for public and private-sector jobs. The national unemployment rate will also be released. Weekly readings on mortgage rates and jobless claims are also expected.

What’s Ahead For Mortgage Rates This Week – December 28, 2020

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Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly average mortgage rates were also released, but readings for jobless claims were not released due to the Christmas holiday. Single-Family Home Sales Fall in November Sales of new and previously owned homes were lower in November. Fear of rising covid-19 cases and the usual slump in home sales during the winter holidays contributed to fewer home sales. Rapidly rising home prices cooled buyer interest; short supplies of pre-owned homes for sale drove prices of new homes higher as demand increased. Inventory of new homes increased by 14 percent as the median price of a new single-family home rose to $335,000, which was five percent higher year-over-year. George Ratiu, a senior economist with Realtor.com, said that would-be homebuyers were dealing with an increased divide between their home-buying preferences and affordability. Rising materials costs continued to drive new home prices up; builders faced challenges in constructing affordable homes due to higher materials costs and lower profit margins. November sales of previously-owned homes were lower with 6.69 million sales reported on a seasonally-adjusted annual basis as compared to October’s reading of 6.86 million sales. Short inventories of available pre-owned homes caused a dip in sales as buyers competed for fewer available homes. Shortages of available homes are expected to persist into 2021 and to drive home prices higher. Affordability will challenge many buyers even as mortgage rates remain at or near record lows. Mortgage Rates Lower Rates for fixed-rate mortgages dipped last week according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was one basis point lower at 2.66 percent; rates for 15-year fixed-rate mortgages averaged 2.19 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.50 percent for 15-year fixed-rate mortgages, and 0.20 percent for 5/1 adjustable rate mortgages. The University of Michigan reported a lower index reading of 80.7 for December as compared to an expected reading of 81.0 and November’s reading of 76.9. A post-Thanksgiving surge in Covid-19 cases caused consumer sentiment to fall. What’s Next This week’s scheduled economic readings include Case-Shiller’s Housing Market Indices, pending home sales, and weekly readings on mortgage rates and jobless claims. Last week’s economic news included readings on sales of new and previously-owned homes and consumer sentiment. Weekly average mortgage rates were also released, but readings for jobless claims were not released due to the Christmas holiday.

Single-Family Home Sales Fall in November

Sales of new and previously owned homes were lower in November. Fear of rising covid-19 cases and the usual slump in home sales during the winter holidays contributed to fewer home sales. Rapidly rising home prices cooled buyer interest; short supplies of pre-owned homes for sale drove prices of new homes higher as demand increased.

Inventory of new homes increased by 14 percent as the median price of a new single-family home rose to $335,000, which was five percent higher year-over-year. George Ratiu, a senior economist with Realtor.com, said that would-be homebuyers were dealing with an increased divide between their home-buying preferences and affordability.

Rising materials costs continued to drive new home prices up; builders faced challenges in constructing affordable homes due to higher materials costs and lower profit margins.

November sales of previously-owned homes were lower with 6.69 million sales reported on a seasonally-adjusted annual basis as compared to October’s reading of 6.86 million sales. Short inventories of available pre-owned homes caused a dip in sales as buyers competed for fewer available homes. Shortages of available homes are expected to persist into 2021 and to drive home prices higher. Affordability will challenge many buyers even as mortgage rates remain at or near record lows.

Mortgage Rates Lower

Rates for fixed-rate mortgages dipped last week according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage was one basis point lower at 2.66 percent; rates for 15-year fixed-rate mortgages averaged 2.19 percent and were two basis points lower. The average rate for 5/1 adjustable rate mortgages was unchanged at 2.79 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.50 percent for 15-year fixed-rate mortgages,  and 0.20 percent for 5/1 adjustable rate mortgages.

The University of Michigan reported a lower index reading of 80.7 for December as compared to an expected reading of 81.0 and November’s reading of 76.9. A post-Thanksgiving surge in Covid-19 cases caused consumer sentiment to fall.

What’s Next

This week’s scheduled economic readings include Case-Shiller’s Housing Market Indices, pending home sales, and weekly readings on mortgage rates and jobless claims.

What’s Ahead For Mortgage Rates This Week – November 9, 2020

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What's Ahead For Mortgage Rates This Week - November 9 , 2020Last week’s economic news included readings on construction spending, the Fed’s Federal Open Market Committee statement, and a press conference by Federal Reserve chairman Jerome Powell. Labor data on public and private sector jobs and the national unemployment rate were reported along with weekly readings on mortgage rates and jobless claims.

Residential Developments Lead September Construction Spending

High demand for homes continued to fuel home construction, but public and non-residential construction spending was slower according to the Commerce Department. Residential construction spending rose by 2.70 percent on a seasonally-adjusted annual basis while public construction spending decreased by -1.70 percent and non-residential construction spending dropped by -1.60 percent.

Changing priorities for home buyers including accommodations for work-from-home spaces and moving away from congested urban areas drove demand for  single-family homes. Commercial and public construction was sidelined as concerns over municipal spending and less revenue sidelined business and public construction spending. A new wave of COVID-19 cases also dampened commercial and public construction plans.

FOMC Statement and Fed Chair’s Press Conference

The Federal Open Market Committee of the Federal Reserve said it would leave the target Federal Funds range unchanged at 0.00 to 0.25 percent to promote access to business and personal credit. Factors contributing to the Committee’s decision included observations that demand for goods and services decreased and lower oil prices held down inflation. Committee members expected the spread of COVID-19 to impact the economy, employment, and inflation in the near term. The virus is expected to pose serious risks to economic forecasts over the medium term.

Fed Chair Jerome Powell said that the economy continued to recover from its low in the second quarter, but the pace of economic improvement has since slowed. Travel and hospitality sectors were hard-hit due to requirements for social distancing and wearing masks; Chair Powell emphasized that following public health guidelines was the only way that the COVID-19 virus could be controlled.

Mortgage Rates Mixed as Jobless Claims Fall

Freddie Mac reported mixed movement for average mortgage rates with rates for 30-year fixed-rate mortgages three basis points lower at 2.78 percent. Rates for 15-year fixed-rate mortgages averaged 2.32 percent and were unchanged. Rates for 5/1 adjustable rate mortgages averaged 2.89 percent and were one basis point higher. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and averaged 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell to 751,000 last week as compared to the prior week’s reading of 758,000 first-time claims filed. Continuing jobless claims were also lower last week with 7.38 million continuing claims filed as compared to the prior week’s reading of 7.81 million ongoing claims filed.

Public and Private  Sector Job Growth Slows in October

ADP reported 365,000 private-sector jobs added in October as compared to 753,000 jobs added in September. The Commerce Department reported 638,000 public and private sector jobs added in October as compared to the prior month’s reading of 672,000 public and private sector jobs added. The National Unemployment rate was also lower at 6.90 percent, which was lower than the expected reading of 7.60 percent and the previous month’s reading of 7.90 percent.

What’s Ahead

This week’s scheduled economic releases include readings on inflation and consumer sentiment. Weekly updates on mortgage rates and jobless claims will also be released.

What’s Ahead For Mortgage Rates This Week – November 2, 2020

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What's Ahead For Mortgage Rates This Week - November 2, 2020Last week’s economic reporting included home price data from Case-Shiller Home Price Indices along with readings on pending home sales, new home sales, and consumer sentiment. Weekly reports on mortgage rates and jobless claims were also released.

Case-Shiller: August Home Prices Rise at Fastest Pace in Two Years

Home prices rose at a seasonally-adjusted annual pace of 5.70 percent in August according to Case-Shiller’s National Home Price Index. U.S. home prices rose by 4.80 percent in July

The Case-Shiller 20-City Home Price Index showed 5.20 percent year-over-year home price growth in August.

Phoenix, Arizona, held first place in home price growth for the 15th consecutive month. Seattle, Washington followed with 8.50 percent year-over-year growth in home prices. San Diego, California reported 7.60 percent year-over-year growth in home prices.

New and Pending Home Sales Fall in September

New homes sold at a pace of 959,000 sales on a seasonally adjusted annual basis in September.  Analysts expected a sales pace of 1.033 million sales based on August’s pace of 994,000 sales. Sales fell with the end of the peak home-buying season and may have also slowed due to rising COVID-19 cases. Demand for homes has been high as buyers’ shifting priorities were expected to cause more families to relocate to less congested suburbs. Pending home sales fell by 2.20 percent in September according to the National Association of Realtors®. Signed sales contracts were 20.50 percent higher year over year.

Mortgage Rates, Jobless Claims Fall

Freddie Mac reported little change in average mortgage rates last week. Rates for 30-year fixed-rate mortgages rose by one basis point to 2.81 percent. Rates for 15-year fixed-rate mortgages averaged 2.32 percent and were one basis point higher than for the prior week. Mortgage rates for 5/1 adjustable rate mortgages also rose by one basis point on average. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell last week to 751,000 new claims filed. Analysts expected 770,000 new claims filed based on the prior week’s reading of  791,000 new claims filed. Ongoing jobless claims also fell last week with 7.76 million ongoing claims filed as compared to the prior week’s reading of 8.47 million continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index rose to an index reading of 81.8 in October as compared to September’s reading of 80.4 and an expected index reading of 81.2.

What’s Ahead

This week’s scheduled economic reports include a statement and press conference by the Fed’s Federal Open Market Committee. Construction spending data and labor sector readings on public and private sector jobs and the national unemployment rate will also be released along with weekly readings on mortgage rates and jobless claims.