Friday – June 24, 2022
New Home Sales rose 10.7% in May from April to an annual rate of 696,000 units versus the 588,000 expected. April was revised higher to 629,000 from 591,000. Sales were down 5.9% from May 2021. Sales fell in the Northeast and Midwest and rose in the South and West. The median price rose nearly 16% annually to $449,000 while the average sales price rose to $511,000. Supply was seen at 7 months.
Redfin reports demand for vacation homes is now below pre-pandemic levels. Redfin says surging prices and borrowing costs coupled with a slowdown in economic growth including added second-home loan fees, have dampened demand for the pandemic-driven vacation-home boom. A Redfin spokesperson said, “Many would-be second-home buyers are deterred by turmoil in the stock markets, high inflation and recession fears, and they can be quicker to pull back from the market because vacation homes aren’t a necessity the way primary homes are. The cool down in the second-home market is likely to continue as long as mortgage rates are elevated and the stock market is slumping.”
Consumer Sentiment plunged to an all time low this month with inflation the driving force in June with expected bad times in the year ahead for businesses. The Consumer Sentiment Index fell to 50 in the final reading this month, 14.4% below May for the lowest reading on record. June is down nearly 42% from June 2021. The survey said that ‘consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines.’
Courtesy of Mortgage Market Guide
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Thursday – June 23, 2022
Home borrowing costs increased this week to their highest levels since late 2008. Freddie Mac reports that the 30-year fixed-rate mortgage rose to 5.81% this week from 5.78% last week with an average of 0.8 in points and fees. A year ago the rate was 3.02%. The 15-year inched higher to 4.92% from 4.81% with a 0.9 point. A year ago that 15-year was 2.34%. Sam Khater, Freddie Mac’s Chief Economist said, “The combination of rising rates and high home prices is the likely driver of recent declines in existing home sales. However, in reality many potential homebuyers are still interested in purchasing a home, keeping the market competitive but leveling off the last two years of red-hot activity.”
Americans filing for first time unemployment benefits were essentially unchanged in the latest week as the cockeyed labor market continues to raise questions. Weekly Initial Jobless Claims rose fell by 2,000 to 229,000 and above the 227,000 expected. Continuing claims rose to 1.315 million from 1.310 million. There are currently 11.5 million jobs available with 6.5 million unemployed while 47% of small business owners recently reported job openings that could not be filled.
Courtesy of Mortgage Market Guide
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Wednesday – June 22, 2022
Mortgage rates rose to their highest level since November 2008 in the MBA’s latest survey. The 30-year fixed-rate mortgage jumped 33 basis points to 5.98% with 0.77 points for the week ended June 17, 2022, reports the MBA. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, gained 4.2%, the Refinance Index fell 3.1% and the Purchase Index was up 8%. Spokesperson Joel Kan said, “Mortgage rates are now almost double what they were a year ago, leading to a 77 percent drop in refinance volume over the past 12 months.”
Rental prices across the country rose for the 15th month in a row to a fresh record high, reports Realtor.com. Prices jumped 15.5% annually in May to a median price of $1,849 in the nation’s largest metropolitan areas. Rents surged 26.6% over the past two years. There was some relief as there was a 16.5% annual increase in April after the 17% rise in March. “After a long period of accelerating rental price growth, we’re seeing rental growth start to taper off over the last five months,” says Joel Berner, senior economic research analyst at Realtor.com. “The pace was unsustainable. That’s a natural limit to what [landlords] can reasonably charge.”
Courtesy of Mortgage Market Guide
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Tuesday – June 21, 2022
Existing Homes Sales fell for the fourth month in a row in May to an annual rate of 5.41 million units, down 3.4% from April and down 8.4% from a year ago. Inventories sit at a low 2.6 month supply up from 2.2 months in April. The median home prices rose to a record $407,600, up 18.4% from a year ago. Sales fell in the Midwest, South and West and squeaked out a gain in the Northeast. “Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun.
The MBA recently reported that mortgage applications to purchase a new home fell 4% in May from April and were down 5% from a year ago. By product type, conventional loans composed 75.8% of loan applications, FHA loans 13.6%, RHS/USDA 0.2% and VA loans 10.4%. The average loan size of new homes fell from $436,576 in April to $430,855 in May. “Applications to purchase new homes in May fell by 4 percent from April, as mortgage rates hit 5.5 percent and further dampened demand. Activity was already constrained due to tight for-sale inventory, high sales prices, and extended building completion timelines,” said spokesperson Joel Kan.
As the week kicks off, stocks are rebounding after the big losses seen last week. The closely watched S&P 500 is now down nearly 23% from its all-time closing high of 4,793 hit back on January 4 of this year. The Dow closed below 30,000 on Friday for the first time since January 2021 but is above that level today. WTI oil is higher today to $110.57/bbl while the average national gas price inched lower to $4.96 from last week’s $5.02 record high.
Courtesy of Mortgage Market Guide
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