NAR reports existing home sales drop 5.9% YoY | Pound Ridge Real Estate

  • Existing-home sales fell for the third straight month to a seasonally adjusted annual rate of 5.61 million. Sales were down 2.4% from the prior month and 5.9% from one year ago. 
  • With slower demand, the inventory of unsold existing homes climbed to 1.03 million by the end of April, or the equivalent of 2.2 months of the monthly sales pace.
  • The median existing-home sales price increased at a slower year-over-year pace of 14.8% to $391,200.

Existing-home sales recorded a third straight month of declines, slipping slightly in April, according to the National Association of Realtors®. Month-over-month sales were split amongst the four major U.S. regions, with two areas posting gains and the other two experiencing waning in April. Year-over-year sales struggled, as each of the four regions reported dips.

Total existing-home sales,[i] https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).

“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” said Lawrence Yun, NAR’s chief economist. “It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years.”

Total housing inventory[ii] at the end of April amounted to 1,030,000 units, up 10.8% from March and down 10.4% from one year ago (1.15 million). Unsold inventory sits at a 2.2-month supply at the current sales pace, up from 1.9 months in March and down from 2.3 months in April 2021.

“Housing supply has started to improve, albeit at an extremely sluggish pace,” said Yun.

He also noted the rare state of the current marketplace.

“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” said Yun.

“Moreover, an increasing number of buyers with short tenure expectations could opt for 5-year adjustable-rate mortgages, thereby assuring fixed payments over five years because of the rate reset,” he added. “The cash buyers, not impacted by mortgage rate changes, remain elevated.”

The median existing-home price[iii] for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longest-running streak on record.

Properties typically remained on the market for 17 days in April, equal to both the number of days in March 2022 and in April 2021. Eighty-eight percent of homes sold in April 2022 were on the market for less than a month.

First-time buyers were responsible for 28% of sales in April, down from 30% in March and from 31% in April 2021. NAR’s 2021 Profile of Home Buyers and Sellers – released in late 2021[iv] – reported that the annual share of first-time buyers was 34%.

All-cash sales accounted for 26% of transactions in April, down from 28% in March and up from the 25% recorded in April 2021.

Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in April, down from 18% in March and equal to 17% in April 2021.

Distressed sales[v] – foreclosures and short sales – represented less than 1% of sales in April, equal to the percentage seen in March and down from 2% in April 2021.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% in April, up from 4.17% in March. The average commitment rate across all of 2021 was 2.96%.

Realtor.com®‘s Market Trends Report in April shows that the largest year-over-year median list price growth occurred in Miami (+38.3%), Las Vegas (+32.6%), and Orlando (+30.7%). Austin reported the highest growth in the share of homes that had their prices reduced compared to last year (+6.8 percentage points), followed by Las Vegas (+5.3 percentage points) and Sacramento (+4.7 percentage points).

Single-family and Condo/Co-op Sales

Single-family home sales decreased to a seasonally adjusted annual rate of 4.99 million in April, down 2.5% from 5.12 million in March and down 4.8% from one year ago. The median existing single-family home price was $397,600 in April, up 14.8% from April 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 620,000 units in April, down 1.6% from March and down 13.9% from one year ago. The median existing condo price was $340,000 in April, an annual increase of 13.1%.

“As we find ourselves in the midst of a massive housing shortage, NAR continues to work with leaders across the private and public sectors to help close this deficit,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “As the nation’s largest real estate association, we are urging policymakers to enact zoning reforms, homebuilder incentives, and other necessary regulations to help correct this situation.”

Regional Breakdown

Existing-home sales in the Northeast rose 1.5% in April, reaching an annual rate of 670,000, a 10.7% drop from April 2021. The median price in the Northeast was $412,100, up 8.1% from one year ago.

Existing-home sales in the Midwest grew 3.1% from the prior month to an annual rate of 1,310,000 in April, a 1.5% slide from April 2021. The median price in the Midwest was $282,000, an 8.7% increase from one year ago.

Existing-home sales in the South fell 4.6% in April, posting an annual rate of 2,490,000, which represents a decrease of 5.7% from one year ago. The median price in the South was $352,100, a 22.2% climb from one year prior. For the eighth consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions. Additionally, the South is the only region to report year-over-year double-digit price gains.

Existing-home sales in the West dipped 5.8% compared to the previous month, registering an annual rate of 1,140,000 in April, down 8.1% from one year ago. The median price in the West was $523,000, up 4.3% from April 2021.

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

# # #

For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

NOTE: NAR’s Pending Home Sales Index for April is scheduled for release on May 26, and Existing-Home Sales for May will be released on June 21; release times are 10:00 a.m. ET.

Information about NAR is available at www.nar.realtor. This and other news releases are posted on the NAR Newsroom at www.nar.realtor/newsroom. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab.


[i] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

[ii] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

[iii] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

[v] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

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https://www.globenewswire.com/news-release/2022/05/19/2447085/0/en/Existing-Home-Sales-Retract-2-4-in-April.html

Mortgage rates average 5.25% | Bedford Corners Real Estate

 Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey ®(PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 5.25 percent.

“Economic uncertainty is causing mortgage rate volatility,” said Sam Khater, Freddie Mac’s Chief Economist. “As a result, purchase demand is waning, and homebuilder sentiment has dropped to the lowest level in nearly two years. Builders are also dealing with rising costs, meaning this posture is likely to continue.”

News Facts

  • 30-year fixed-rate mortgage averaged 5.25 percent with an average 0.9 point as of May 19, 2022, down from last week when it averaged 5.30 percent. A year ago at this time, the 30-year FRM averaged 3.00 percent.
  • 15-year fixed-rate mortgage averaged 4.43 percent with an average 0.9 point, down from last week when it averaged 4.48 percent. A year ago at this time, the 15-year FRM averaged 2.29 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.08 percent with an average 0.2 point, up from last week when it averaged 3.98 percent. A year ago at this time, the 5-year ARM averaged 2.59 percent.

The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

Housing construction activity declines, mortgage applications fall | Chappaqua Real Estate

Housing starts (chart) for April dipped 0.2% month-over-month (m/m) to an annual pace of 1,724,000 units, below the Bloomberg consensus estimate of a 1,756,000 unit pace, and compared to March’s downwardly-revised pace of 1,728,000 units. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, fell by 3.2% m/m to an annual rate of 1,819,000, slightly above expectations calling for 1,814,000 units, and compared to the downwardly-revised 1,870,000 unit pace in March.

In other housing news, the MBA Mortgage Application Index fell 11.0% last week, following the prior week’s increase of 2.0%. The index snapped a string of two weekly increases as a 9.5% fall in the Refinance Index was met with an 11.9% tumble for the Purchase Index. However, the average 30-year mortgage rate pulled back from a recent spike, declining 4 basis points (bps) to 5.49%, but is up 234 bps versus a year ago.

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schwab.com

Home Builders Warn of Significant Affordability Declines | Armonk Real Estate

Housing affordability posted a modest gain for average conditions in the first quarter of 2022 as a strong jump in national median income helped to offset a gradual rise in interest rates. However, home builders warn of current deteriorating conditions as a sharp jump in mortgage rates in March and April coupled with ongoing building material supply chain disruptions, labor shortages and high inflation drive up housing costs.

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), 56.9% of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $90,000. While this is up from the 54.2% of homes sold in the fourth quarter of 2021, current market indicators point to worsening affordability conditions.

The first quarter HOI was calculated based on the following key factors:

  • An average quarterly interest rate of 3.86%, up 70 basis points from the previous quarter
  • A 2022 median income of $90,000, up from last year’s $79,900.
  • A national median home price of $365,000, up $5,000 from the fourth quarter of 2021 and a whopping $45,000 from the first quarter of 2021.

Affordability Dips Below 50% Based on Recent Mortgage Rates

Keeping all other factors the same and calculating nationwide affordability conditions based on end of April mortgage rates of 5.11% instead of the first quarter average of 3.86%, the HOI would have fallen from 54.2 in the fourth quarter of 2021 to 48.7 today.

This means that based on where the housing market stands today, just 48.7% of homes sold in the first quarter were affordable to median-income families, the lowest affordability level recorded on the HOI since the beginning of the revised series in the first quarter of 2012.

“The first quarter reading is a backward gauge, as surging interest rates, ongoing building material supply chain constraints and labor shortages continue to raise construction costs and put upward pressure on home prices,” said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga.

Every quarter-point hike in mortgage rates means that 1.3 million households are priced out of the market for a nationwide median priced home. And with the Federal Reserve moving aggressively to raise short-term interest rates and reduce its holding of mortgage-backed securities to combat inflation that is running at a 40-year high, mortgage rates are expected to rise even further.

“Looking at current market conditions, affordability woes continue to mount as rising interest rates and home building material costs that are up 20% year-over-year are causing housing costs to rise much faster than wages,” said NAHB Chief Economist Robert Dietz. “The HOI falling below 50 using these real-time estimates is an indication of significant housing affordability burdens, particularly for frustrated, prospective first-time buyers. The best way to ease growing affordability challenges is for policymakers to address ongoing supply chain disruptions that will allow builders to construct more affordable homes.”

The Most and Least Affordable Markets in the First Quarter

Lansing-East Lansing, Mich., was the nation’s most affordable major housing market, defined as a metro with a population of at least 500,000. There, 92.3% of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $89,500.

Top five affordable major housing markets:

  1. Lansing-East Lansing, Mich.
  2. Indianapolis-Carmel-Anderson, Ind.
  3. ScrantonWilkes-Barre, Pa.
  4. Rochester, N.Y.
  5. Dayton-Kettering, Ohio

Meanwhile, Wheeling, W.Va.-Ohio., was rated the nation’s most affordable small market, with 97.3% of homes sold in the first quarter being affordable to families earning the median income of $75,400.

Top five affordable small housing markets:

  1. Wheeling, W.Va.-Ohio
  2. Cumberland, Md.-W.Va.
  3. Elmira, N.Y.
  4. Utica-Rome, N.Y.
  5. Davenport-Moline-Rock Island, Iowa-Ill.

For the sixth straight quarter, Los Angeles-Long Beach-Glendale, Calif., remained the nation’s least affordable major housing market. There, just 8.3% of the homes sold during the first quarter were affordable to families earning the area’s median income of $90,100.

Top five least affordable major housing markets—all located in California:

  1. Los Angeles-Long Beach-Glendale
  2. Anaheim-Santa Ana-Irvine
  3. San Francisco-San Mateo-Redwood City
  4. San Diego-Chula Vista-Carlsbad
  5. Stockton

The top five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, Calif., where 9.2% of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $90,100.

Top five least affordable small housing markets—all located in California:

  1. Salinas
  2. Santa Maria-Santa Barbara
  3. San Luis Obispo-Paso Robles
  4. Napa
  5. Santa Cruz-Watsonville

Please visit nahb.org/hoi for tables, historic data and details.

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nahb.org

Building materials prices up 19% | Mt Kisco Real Estate

According to the latest Producer Price Index (PPI) report released today by the Bureau of Labor Statistics, the prices of goods used in residential construction ex-energy (not seasonally adjusted) climbed 0.5% in April, following upwardly revised increases of 1.9% and 2.4% in March and February, respectively. This adds up to an 4.9% increase in building materials prices since the start of 2022. Year-over-year, building materials prices are up 19.2% and have risen 35.6% since the start of the pandemic.

The price index of services inputs to residential construction registered a similar increase, rising 0.9% in April. However, the index was upwardly revised for March, causing the monthly increase to jump from 3.2% to 6.8% over the month. As a result, the price index of services used in home building (including trade services, transportation and warehousing) has climbed 13.3% since the start of the year. Year-over-year, the index has increased 18.1% and is up 45.6% since the start of the pandemic.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) declined 15.6% in April following a downwardly revised 5.4% increase in March and a 2.5% gain in February. As a result, the index is down 8.9% over the first four months of 2022. Since reaching its most recent trough in September 2021, prices have risen 60.4%.

Steel Products

Steel mill products prices (NSA) climbed 2.4% in April–the first monthly increase since December 2021. Nonetheless, the first four months of 2022 have been positive for the cost of derivative steel products after increasing 128.0% in 2021.

Ready-Mix Concrete

The PPI for ready-mix concrete (RMC) resumed its upward trend after a small decline in March (-0.2%) as prices rose 1.3% (SA) in April. The index has climbed 8.9% year-over-year and is 12.6% higher than the January 2021 reading.

Gypsum Products

The PPI for gypsum products (SA) was flat in April. Year-over-year, the prices of gypsum products are 17.8% higher and have increased 23.5% since January 2021.

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eyeonhousing.org

Year-Over-Year Home Price Growth Exceeds 20% in March | North Salem Real Etate

The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through March 2022 and forecasts through March 2023.

CoreLogic HPI™ is designed to provide an early indication of home price trends. The indexes are fully revised with each release and employ techniques to signal turning points sooner. CoreLogic HPI Forecasts™ (with a 30-year forecast horizon), project CoreLogic HPI levels for two tiers—Single-Family Combined (both Attached and Detached) and Single-Family Combined excluding distressed sales.

The report is published monthly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes home price indices (including distressed sales); home price forecasts and market condition indicators. The data incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.

HPI National Change

March 2022 National Home Prices

Home prices nationwide, including distressed sales, increased year over year by 20.9% in March 2022 compared with March 2021. On a month-over-month basis, home prices increased by 3.3% in March 2022 compared with February 2022 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).

Forecast Prices Nationally

The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 1.2% from March 2022 to April 2022 and on a year-over-year basis by 5.9% from March 2022 to March 2023.

 Figure 1 HPI National Change

HPI & Case-Shiller Trends

This graph shows a comparison of the national year-over-year percent change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to present month with forecasts one year into the future. We note that both the CoreLogic HPI Single Family Combined tier and the CoreLogic Case-Shiller Index are posting positive, but moderating year-over-year percent changes, and forecasting gains for the next year.

Economic Impact on Home Prices

U.S. home prices continued to post significant year-over-year gains in March, up by 20.9%, another record high. Even with the past year’s streak of double-digit price increases, annual gains are projected to slow to around 6% by next March, due in part to rising mortgage rates and higher home prices hampering affordability for some home shoppers. Buyers who closed on a property in March had a good chance of locking in mortgage rates around 4% or slightly lower. By late April, rates had moved up to more than 5%, a jump of about 30% from the same time last year and a trend that might derail more prospective buyers.

Figure 3 Covid Update

“The annual growth in the U.S. index was the largest we have measured in the 45-year history of the CoreLogic Home Price Index,” said Dr. Frank Nothaft, chief economist at CoreLogic. Couple that price increase with the rapid rise in mortgage rates and buyer affordability has fallen sharply. In April, 30-year fixed mortgage rates averaged nearly 2 percentage points higher than one year earlier. With the growth in home prices, that means the monthly principal and interest payment to buy the median-priced home was up about 50% in April compared with last April.”

– Dr. Frank Nothaft 
Chief Economist for CoreLogic

HPI National and State Maps – March 2022

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

Nationally, home prices increased 20.9% year over year in March. No states posted an annual decline in home prices. The states with the highest increases year over year were Florida (31.4%), Arizona (28.7%) and Tennessee (26.7%).

Figure 4 HPI Change by State Map

HPI Top 10 Metros Change

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

These large cities continued to experience price increases in February, with Phoenix on top at 32.5% year over year.

Figure 5 HPI Top US Metros

Markets to Watch: Top Markets at Risk of Home Price Decline

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Lake Havasu City-Kingman, AZ is at a very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Prescott, AZ and Bridgeport-Stamford-Norwalk, CT are also at a very high risk for price declines. Bremerton-Silverdale, WA and Urban Honolulu, HI are at a high risk (50-70%) of a decline.  

Figura 6 HPI Markets to watch

Summary

CoreLogic HPI features deep, broad coverage, including non-disclosure state data. The index is built from industry-leading real-estate public record, servicing, and securities databases—including more than 40 years of repeat-sales transaction data—and all undergo strict pre-boarding assessment and normalization processes.

CoreLogic HPI and HPI Forecasts both provide multi-tier market evaluations based on price, time between sales, property type, loan type (conforming vs. non-conforming) and distressed sales, helping clients hone in on price movements in specific market segments.

Updated monthly, the index is the fastest home-price valuation information in the industry—complete home-price index datasets five weeks after month’s end. The Index is completely refreshed each month—all pricing history from 1976 to the current month—to provide the most up-to-date, accurate indication of home-price movements available.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

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corelogic.com/intelligence/

Case Shiller home prices up 19% | Waccabuc Real Estate

Home prices increased 19.8% in February year over year, according to the S&P CoreLogic Case-Shiller national home price index. That is up from the 19.1% annual increase in January and is the third-highest reading in the index’s 35-year history.

The 10-city composite annual increase came in at 18.6%, up from 17.3% in the previous month. The 20-city composite was up 20.2%, rising from 18.9%.

Sun Belt cities continued to see the highest gains. Phoenix, Tampa, Florida, and Miami saw annual home price gains of 32.9% 32.6% and 29.7%, respectively. All 20 cities reported higher price increases in the year ending February 2022 versus the year ending January 2022.

Minneapolis, New York and Washington, D.C., saw the smallest price gains, although they were still in the double digits.

“The macroeconomic environment is evolving rapidly and may not support extraordinary home price growth for much longer,” wrote Craig Lazzara, managing director at S&P DJI, in a release. “The post-Covid resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”

While mortgage rates began rising slowly at the start of this year, they didn’t really take off sharply higher until March. Given that this reading is a three-month running average through February, it doesn’t show much of an impact from rates. That could be coming next, though.WATCH NOWVIDEO02:04Home prices keep rising, despite drop in sales

“Today’s S&P Case Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates. The imbalance between strong demand and insufficient supply pushed prices higher,” said George Ratiu, manager of economic research at Realtor.com

For a median-priced home financed with a 30-year loan, the monthly payment is $550 higher than a year ago, an increase of 46%, according to calculations by Realtor.com

Prices historically tend to lag sales by about six months, and pending sales, which measure signed contracts, have been falling for four straight months through February, according to the National Association of Realtors. March’s reading will be released Wednesday.

“As we move through the spring housing market, we are seeing clear signs of cooling demand. Many buyers are deciding to take a step back and re-evaluate their budgets and timelines,” added Ratiu.

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cnbc.com

Mortgage rate averages 5.11% | Cross River Real Estate

 Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 5.11 percent.

“Mortgage rates increased for the seventh consecutive week, as Treasury yields continued to rise,” said Sam Khater, Freddie Mac’s Chief Economist. “While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand. It continues to be a seller’s market, but buyers who remain interested in purchasing a home may find that competition has moderately softened.”

News Facts

  • 30-year fixed-rate mortgage averaged 5.11 percent with an average 0.8 point as of April 21, 2022, up from last week when it averaged 5.00 percent. A year ago at this time, the 30-year FRM averaged 2.97 percent.
  • 15-year fixed-rate mortgage averaged 4.38 percent with an average 0.8 point, up from last week when it averaged 4.17 percent. A year ago at this time, the 15-year FRM averaged 2.29 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.75 percent with an average 0.3 point, up from last week when it averaged 3.69 percent. A year ago at this time, the 5-year ARM averaged 2.83 percent.

The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Consumer Inflation Hits Highest Level Since 1981 | South Salem Real Estate

The Consumer Price Index (CPI), which measures inflation on the consumer level, rose by 1.2% in March. This pushed the year over year reading higher from 7.9% to 8.5%, which is the hottest reading in 41 years.


Core (CPI), which strips out volatile food and energy prices, rose by 0.3%. As a result, year over year Core CPI increased from 6.4% to 6.5%, which was a bit less than anticipated. The headline inflation jump was expected due to rising oil and food prices, but the Core reading was cooler than anticipated and garnered a positive
reaction in the Bond market when the data was released last Tuesday.


Within the report, rents rose 0.4% in March and increased from 4.2% to 4.4% on a year over year basis. While this data has started to increase, the CPI report is still not capturing the double digit increases year over year that many other rent reports are showing.

Owners’ equivalent rent also increased 0.4% and the year over year figure rose from 4.3% to 4.5%. However, note that this data is based on a survey that asks homeowners, “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?” Understandably, this is very subjective and many people would be guessing these amounts so while this data tries to capture the rise in home prices, it does a poor job.


Some other notable price increases since last year include food (+9%), gasoline (+48%) and used cars (+35%).


Why is rising inflation significant? Besides causing higher prices, inflation is the arch enemy of fixed investments like Mortgage Bonds because it erodes the buying power of a Bond’s fixed rate of return. If inflation is rising, investors demand a rate of return
to combat the faster pace of erosion due to inflation, causing interest rates to rise as we’ve seen this year.

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loandepot.com

Home builder confidence falls again | Katonah Real Estate

Sharply rising mortgage rates are taking their toll on the nation’s home builders, as already pricey new construction becomes even less affordable. 

Builder confidence in the market for new single-family homes fell 2 points to 77 in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 is considered positive sentiment, but the reading marks the fourth straight month of declines for the index, which stood at 83 in April 2021.

Of the index’s three components, current sales conditions fell 2 points to 85. Buyer traffic dropped 6 points to 60, and sales expectations in the next six months increased 3 points to 73 following a 10-point drop in March.

“Despite low existing inventory, builders report sales traffic and current sales conditions have declined to their lowest points since last summer as a sharp jump in mortgage rates and persistent supply chain disruptions continue to unsettle the housing market,” said NAHB Chairman Jerry Konter, a builder and developer from Savannah, Georgia.

The average rate on the 30-year fixed mortgage stood at around 3.90% at the beginning of March, and is now up to 5.15%, according to Mortgage News Daily. That is the highest rate in more than a decade. The rate loosely follows the yield on the U.S. 10-year Treasury, which has been on the rise, but is also being impacted as the Federal Reserve pulls out of the mortgage-backed bond market.

Elevated mortgage rates are only exacerbating high prices for both new and existing homes. The median price of a newly built home in February was up over 10% from the year prior.

“The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market,” said NAHB Chief Economist Robert Dietz.

Regionally, on a three-month moving average, builder sentiment in the Northeast rose 1 point to a reading of 72. In the Midwest it fell 3 points to 69, in the South it fell 2 points to 82 and in the West it fell 1 point to 89.

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cnbc.com/