BYLT BRIEF: U.S. HOUSING MARKETS
US House Prices Rise for 8th Month in a Row: FHFA
Early in the month of January 2021, the price of single-family houses with mortgages rose by 1.0% in the U.S. December of 2020 similarly experienced an upward rise of home cost by approximately 1.2%. The seasonally adjusted monthly house price ranged between -0.2% among the East South Central division to +1.5% in the Mountain division. Year-on-year growth revealed that residential prices increased in January by 12%. Value changes ranged from +10.2% in the West South Central division to +14.8% in the Mountain division.
Home Ownership Rate in the United States decreased to 65.80 percent in the fourth quarter of 2020 from 67.40 percent in the third quarter of 2020. source: U.S. Census Bureau
United States House Price Index MoM ChangeThe FHFA (Federal Housing Finance Agency) House Price Index measures month over month changes in average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac.
Mortgage Applications Continue to Fall: MBA
March 26th, 2021 unveiled that U.S. mortgage applications decreased by 2.2% solely within that week. Applications for house purchases declined by 1.5% and home refinancing dwindled by 2.5%. Additionally, the interest rate for 30 year fixed rate mortgages dropped from 3.36% to 3.33% therefore ceasing the 7th week of ascending rates. MBA economist, Joel Kan, has stated that higher mortgage rates terminate refinance activity since those who may benefit from a refinance diminish. The expediting price tags for houses are having a rather negative effect on potential spring homebuyers. source: Mortgage Bankers Association of America
Week ending April 2, 2021 mortgage applications decreased by 5.10% over the week of March 26. Mortgage Applications in the United States averaged 0.53 percent from 2007 until 2021, reaching an all time high of 55.40 percent in March of 2020 and a record low of -38.80 percent in January of 2009.
“Banks across the nation, regardless of the almost zero current fed rates, just recently have made it harder for the average person and family to refinance or purchase homes by now raising the bar on creditworthiness and setting minimum credit score goals well into the 700’s. This has not been scene since after the last mortgage crisis of 2008-2012. This combined with the extremely low housing inventory has caused the decrease in applications and mortgages throughout single family home markets” source: AGGRECOST
United States MBA 30-Yr Mortgage Rate
Interest rates for 30-year-fixed rate mortgages fell from 3.36% to 3.33% in the week of March 26th, 2021. The consecutive 7 week pattern of increasing mortgage rates was halted. source: Mortgage Bankers Association of America
Week ending April 2nd rates in the United States averaged 3.36 percent. Mortgage Rates in the United States averaged 6.09 percent from 1990 until 2021, reaching an all time high of 10.56 percent in April of 1990 and a record low of 2.85 percent in December of 2020.
MBA 30-Year Mortgage Rate is average 30-year fixed mortgage lending rate measured during the reported week and backed by the Mortgage Bankers Association.
Pending Home Sales Fall for 1st Time in 9 Months
January 2021 encountered a 13.5% rise in pending home sales in the U.S. However the following month of February experienced a 0.5% fall; the first decline since May when interest rates were astronomically high and supply was historically low. Pending home sales shrank by about 10.6% on a monthly basis. Lawrence Yun, NAR’s chief economist, has expressed that although home purchasing is in widespread demand and multiple offers are present, contracts are not being signed due to incredibly low inventory stock. The upper end market has a sensible supply and therefore are experiencing greater prosperity in comparison. Demand however is not impacted by the rise in mortgage rates.