Real Estate & Market Report: March 28, 2014
This week has been all about housing. Although the reports are not showing tremendous growth, there are indications that the housing market is continuing its very slow but steady recovery.
According to the Federal Housing Finance Administration, home prices gained 0.5 percent in January which piggybacks on December's 0.7 percent rise. Although the increase is less than the prior month, the report continues to indicate a positive trend in values.
Of the nine regions surveyed, eight of them showed gains in the last month. The only area to decline was the West South Central. Much slower growth than last year. Compared to the same time a year ago, prices are 7.4 percent higher.
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The second major housing report for the week comes from the Case-Shiller Home Price Index. This report showed that home prices are still rising but not quite as much as before. Case-Shiller's adjusted monthly sales gain for January is strong with a 0.8 percent increase. In line with the FHFA data, the Case-Shiller report shows that home prices are higher than a year ago.
This report shows prices are 13.3 percent higher. The value gains are very convincing with all 20 cities showing increases led by the West coast. Florida and several Midwest and Northeast cities also showed strong value increases.
The final housing report for the week was for new home sales. In February the pace of sales in this area could not keep up with the strong pace of January. The annual rate of 440,000 sales was 15,000 less than January's revised figure of 455,000. This slowing did help boost inventory supply upward to 5.2 months for February whereas Januarys pace was 5.0 months. Thin supply has been a major factor in holding down the number of sales nationally. Prices on new homes has also been a factor in keeping sales slow.
According to the Mortgage Bankers Association of America, applications for purchase applications rose 3.0 percent for the week of March 21st. Compared to the same time last year, applications for purchases is down a very sharp 17.0 percent. With home values higher than a year ago and mortgage applications for purchases being lower, that is a clear indication that there continues to be a large contingent of buyers paying cash of their purchases.
With a slight increase in mortgage rates, it is once again proven just how sensitive borrowers are to mortgage rates. The MBA reported for the same week that purchase applications increased, refinance applications declined 8.0 percent.
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Next week the potential market reports are:
- Tuesday April 1st - ISM Manufacturing Index
- Wednesday April 2nd - MBA Applications, ADP Employment Report and Factory Orders
- Thursday April 3rd - First Time Jobless Claims
- Friday April 4th - National Employment Report
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (661)505-4300.