According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.21 percent last week from 4.23 percent the week before. The average 30-year rate on jumbo loans also fell, dropping to 4.55 percent. Despite decreasing rates, the Market Composite Index, which measures total loan application volume, was down 11.7 percent last week, after an adjustment to account for the Thanksgiving holiday. Still, the seasonally adjusted Purchase Index remained steady, declining just 0.8 percent from the previous week. More here.
The S&P/Case-Shiller Home Price Indices shows the U.S. National Home Price Index up just 0.1 percent from the second quarter. But, though the national index registered a drop of 3.9 percent from the third quarter of last year, the rate of decline improved over the year-over-year decrease seen in the second quarter. In September, the annual rate of change improved from August in 14 of the 20 cities covered by the index. David Blitzer, chairman of the index committee at S&P Indices, said the plunging collapse of prices seen in 2007-2009 seems to be over, though a stronger economy would be needed for any sustained recovery. The Federal Housing Finance Agency also found prices relatively flat in the third quarter. Their index recorded a 0.2 percent increase. Andrew Leventis, FHFA’s principal economist, said most regions of the country saw relatively stable home values during the third quarter. More here and here.
After rising 5.7 percent in September, new home sales increased again in October. According to data released by the U.S. Census Bureau and the Department of Housing and Urban Development, sales of new single-family homes rose 1.3 percent above September’s rate and are 8.9 percent above last October’s estimate. The median sales price of new houses sold during the month was $212,300; the average sales price was $242,300. The seasonally adjusted estimate of new houses for sale at the end of the month was 162,000, which represents a supply of 6.3 months at the current sales pace. More here.
A combination of demographics and vacancies provides hope for the housing market’s future, despite the relatively slow pace of the recovery. According to John Burns Real Estate Consulting, housing starts, sales, and prices have been fairly flat in recent months but there are indications that the recovery will accelerate due to falling inventory and the 5.9 million Americans between the ages of 25 and 34 that are currently living with their parents. Burns forecasts 1.43 million in household growth and 1.2 million in new construction as pent-up demand leads more consumers back to the market. That demand will also lead to continued declines in the number of vacant homes. The vacancy rate has been falling since peaking at 3.2 million in 2009. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the seasonally adjusted Purchase Index rose 8.2 percent last week to its highest level since August 12. Despite the gain in purchase demand, the Market Composite Index, which measures total mortgage loan application volume, was down 1.2 percent. Michael Fratantoni, MBA’s vice president of research and economics, said overall refinance activity declined, though there was an increase in applications for government loan programs. The average contract interest rate on 30-year fixed-rate mortgages was unchanged at 4.23 percent. The average 30-year rate for jumbo loans increased to 4.59 percent. More here.