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Posts Tagged ‘Pending Home Sales’

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Case-Shiller: Home Price Growth Expands to All Metro Areas

Case-Shiller: Home Price Growth Expands to All Metro AreasMarch home prices were again dominated by the Northwest with Portland, Oregon posting a year-over-year gain of 12.30 percent followed by Seattle, Washington’s year-over-year gain of 10.80 percent.

Denver, Colorado rounded out the top three cities with a year-over-year gain of 10.00 percent. San Francisco, California, which consistently posted double-digit gains in recent months slipped to a year-over-year gain of 8.50 percent. This may indicate that prices in high cost metro areas are nearing their peak.

S&P Dow Jones Chair David M Blitzer attributed outsized price gains to the shortest supply of available homes since the mid-1980s. Homes for sale account for only two percent of U.S. households. To put rapidly increasing home prices in context, the S&P Case-Shiller 20-City Home Price Index was 11.50 percent below its peak in March, 2006.

Case-Shiller’s 20-City Home Price Index posted a 5.40 percent gain year over year, which was equal to its year-over-year price gain in March 2015. Month-to month home prices gained 0.90 percent; analysts had estimated year-year growth of 5.10 percent and a month-to-month gain of 0.70 percent. All cities in the 20-City Housing Market Index posted gains in month-to-month and year-over-year readings.

Pending Home Sales Exceed Expectations

Pending home sales in April supported trends noted in Case-Shiller’s 20-City Home Price Index. Regional results for pending home sales in April rose by 1.20 percent in the Northeast while pending sales were unchanged in the Midwest. The South posted pending sales gain of 6.80 percent and the West recovered with an 11.40 percent rise in pending sales for April.

Based on April’s pending home sales readings, real estate pros expect a jump in closed sales in May. Home buyer demand remains resilient according to Lawrence Yun, chief economist for the National Association of Realtors. Mr. Yun also said that the key to continued expansion of home sales is providing buyers sufficient supplies of affordable homes. Builders may provide relief by increasing construction, but have cited shortages of labor and developed land as constraints on new construction. Active demand for high-end homes has also focused construction on higher priced homes.

Mortgage applications are also increasing, which indicates that more homes are being purchased by owner-occupant buyers than investors. Relatively low mortgage rates and waning investor interest could provide buyers relying on financing a leg-up in competing for available homes. 

Related Articles:

Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes


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Case-Shiller Report Shows Home Prices Rose in January

Case-Shiller Report Shows Home Prices Rose in JanuaryHome prices were 5.70 percent higher year-over-year in January according to S&P Case-Shiller’s 20-City Home Price Index. Top year-over-year gains were posted by Portland, Oregon at 11.80 percent, San Francisco, California at 10.80 percent and Seattle Washington posted a year-over-year gain of 10.70 percent. Denver, Colorado, which had top gains in recent months, posted year-over-year home price growth of 10.20 percent.

Lowest year over-year gains for January were posted by Chicago, Illinois at 2.10 percent, Washington, D.C at 2.20 percent and New York, New York at 2.80 percent.

Average home prices remained about 12 percent below their summer 2006 peak, but have recovered to 2007 levels.

Rising Home Prices and Short Inventory of Homes Impacts Buyers and Sellers

David M Blitzer, Managing Director and Chair of the S&P Indices Committee expressed concerns over rapidly rising home prices and the shortage of available homes. Mr. Blitzer said “would-be sellers seeking to trade up are having a hard time finding a new larger home.” Analysts also noted that home prices are escalating faster than wages, which were growing at a rate of 2.20 percent annually as of February.

New construction is not keeping up with demand; the current supply of available homes is below the normal six month inventory. Mr. Blitzer said that home building is the segment of the housing sector that creates economic growth.

Rapidly rising home prices and low inventories of available homes are potentially sidelining first-time and moderate income buyers. This trend also sandwiches homeowners who want to buy larger homes between a short supply of available homes and finding qualified buyers for their current homes. Mr. Blitzer said that high amounts of education debt and consumer debt are contributing to younger buyers’ inability to qualify for mortgages. Mortgage lenders have loosened mortgage qualification requirements somewhat, but Mr. Blitzer said that lenders haven’t forgotten what happened 10 years ago; they remain reluctant to further ease lending requirements.

Pending Home Sales Rise in February

In related news, the National Association of Realtors reported that pending home sales rose 3.50 percent in February as compared to an expected reading of 1.80 percent and January’s negative reading of -3.0 percent February’s reading for pending home sales was the highest in seven months.

Analysts and real estate pros use pending home sales readings s as indications of future closings and mortgage loan activity.

NAR Chairman Lawrence Yun cited lower mortgage rates as the driving force behind February’s jump in pending home sales. Mr. Yun said that building more homes is essential for boosting home sales; he cautioned that failure to increase the current supply of available homes could cause home sales to “plateau.”

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Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes


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What’s Ahead For Mortgage Rates This Week – March 7, 2016

What's Ahead For Mortgage Rates This Week - March 7, 2016Week in Review

Last week’s scheduled economic news included reports on pending home sales, construction spending and several jobs related readings including ADP Payrolls, the government’s Non-Farm Payrolls and the national unemployment rate.

Mortgage Rates, Weekly Unemployment Claims Rise

Mortgage rates rose across the board according to Freddie Mac’s weekly report. The average rate for a 30-year fixed rate mortgage rose two basis points to 3.64 percent; the average rate for a 15-year fixed rate mortgage rose by one basis point to 2.94 percent and the average rate for a 5/1 adjustable rate mortgage rose five basis points to 2.84 percent. Discount points were consistent at 0.50 percent for all three types of home loans.

Weekly jobless claims also rose to 278,000 new claims as compared to expectations of 270,000 new claims and the prior week’s reading of $272,000 new jobless claims. While an increase in new unemployment claims may seem discouraging, new claims for unemployment remain near pre-recession lows.

The four-week rolling average of new jobless claims dropped by 1750 claims to 270,250 and reached its lowest reading in three months. Analysts view the four-week reading as more reliable than week-to-week readings that can be volatile.

Pending Home Sales and Construction Spending

In other news, pending home sales fell by 2.50 percent as compared to December’s reading. Analysts expected an increase in pending sales of 0.50 percent; December’s reading was 0.10 percent higher than for November. Pending home sales represent sales contracts that have not yet closed and are considered an indicator of future closings and mortgage activity.

Home sales have been impacted in recent months by a shortage of available homes; this creates a backlog of would-be buyers who can’t find homes they want to buy and also causes rapidly escalating home prices in desirable areas. Bidding wars and cash sales can sideline buyers who can’t pay cash or are whose offers are outbid.

Analysts say that new home construction is a key component of easing the housing shortage. Construction spending increased by 1.50 percent in January, but month-to-month spending for residential projects was flat in January. Spending for residential projects was 7.60 percent higher year-over-year.

Labor Reports Reflect Stronger Economy

Federal and private sector reports on jobs indicate that job growth continues. The Department of Commerce reported that Non-Farm Payrolls grew by 242,000 jobs in February, which was higher than expectations of 195,000 new jobs and January’s reading of 172,000 new jobs. According to ADP, which tracks private sector payrolls, 214,000 new jobs were created in February as compared to expectations of 185,000 new jobs and January’s reading of 193,000 new jobs.

Improving jobs markets are a positive indicator for housing markets as stable employment is important to home buyers’ ability to qualify for mortgages. The National Unemployment Rate remained stable in February with a reading of 4.90 percent; the expected reading and prior month’s reading were also 4.90 percent.

Whats Ahead

Next week’s scheduled economic reports include the NFIB Small Business Index and February’s Federal Budget along with regularly scheduled weekly reports on mortgage rates and new unemployment claims.

Related Articles:

Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes


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What’s Ahead For Mortgage Rates This Week – March 31, 2014

What's Ahead For Mortgage Rates This Week March 31,2014

Last week’s economic news includes several reports about housing markets.

The S&P Case-Shiller 10 and 20 city housing market indices, the FHFA House Price Index, New Home Sales and Pending Home sales reports suggest that the national housing market continues to grow, but at lower rates.

Regional readings varied and suggested that winter weather was a negative influence on affected markets.

In a press conference held on March 19 Federal Reserve Chair Janet Yellen said that severe winter weather had interfered with the Fed’s ability to get a clear reading on economic developments.

The Case-Shiller 10 and 20-City Home Price Indices for January showed year-over-year growth of 13.50 and 13.20 percent respectively. The 20-City Home Price Index reported that 12 of 20 cities reported slower rates of home price appreciation.

The 10-City Index ticked upward, but was little changed. The 20-City index posted its third consecutive month-to-month decline in home prices with a reading of -0.10 percent.

Las Vegas, Nevada led cities posting gains with a month-to-month reading of +1.10 percent, but home values remain 45 percent below peak prices achieved in August 2006.

David M. Blitzer, chair of the Index Committee at S&P Dow Jones Indices, noted that home prices were up 23 percent over their lows in 2012.

FHFA Data Reflects Slower Growth in Home Prices

The FHFA House Price Index reports home price trends for sales of homes with mortgages owned or guaranteed by Fannie Mae or Freddie Mac. January’s data reported a year-over-year gain of 7.40 percent, which is approximately 8.0 percent below its peak in April 2007.

Month-to-month home prices varied within the nine U.S. Census regions and ranged from -0.30 percent to +1.30 percent.

FHFA reported that year-over-year, all nine regions reported gains in home prices that ranged from +3.20 percent in the Middle Atlantic region to 14.0 percent home price growth in the Pacific region.

New and Pending Home Sales Slow

According to the U.S. Department of Commerce, February sales of new homes matched projections at 440,000 as compared to January’s revised reading of 455,000 new homes sold, which was a year-over-year high.

New home sales improved by 37 percent in the Midwest, but fell in the Northeast, South and West. This suggests that while winter weather played a role, but that housing markets are cooling in general.

Rising mortgage rates and concerns over new lending standards likely contributed to the drop in sales.

Pending home sales slumped in February according to the National Association of REALTORS®.

February’s index reading of 93.9 as compared to January’ index reading of 94.7 represented the eighth consecutive monthly drop for pending home sales and was the lowest reading since October 2011.

Pending home sales indicate future completed sales. Lawrence Yun, the NAR’s chief economist, noted that home sales delayed by winter weather may be completed this spring.

Mortgage Rates Rise, Jobless Claims Lower Than Predicted

Freddie Mac reported that average mortgage rates rose across the board last week with the rate for a 30-year fixed rate mortgage rising eight basis points to 4.40 percent. 15-year fixed mortgage rates rose 10 basis points to 3.42 percent.

Average rates for a 5/1 adjustable rate mortgage rose from 3.02 percent to 3.08 percent.

Discount points for fixed rate mortgages were unchanged at 0.60 percent and ticked upward from 0.40 to 0.50 percent for 5/1 adjustable rate mortgages.

What’s Coming Up This Week

This week’s scheduled economic news includes Construction Spending for March,  ADP payrolls for March along with Freddie Mac’s PMMS weekly report on mortgage rates and the BLS Non-Farm Payrolls report. 

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Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes


Pending Home Sales Rise To 22-Month High

Pending Home Sales Index 2011-2012The housing market appears headed for a strong spring season.

After a brief setback in December, the Pending Home Sales Index resumed its climb in January, posting a 2 percent gain over the month prior.

The data puts pressure on Scottsdale home buyers. This is because a “pending home” is a home that’s under contract to sell, but has not yet sold. It’s tracked by the National Association of REALTORS® and, among all housing statistics, it’s the only one that’s “forward-looking”.

The Pending Home Sales Index is important to home buyers throughout CA because 80% of homes under contract to sell close within 60 days of contract. In this way, the Pending Home Sales Index forecasts the housing market 1-2 months into the future.

This is very different from how NAR’s Existing Home Sales report works; or, how the Census Bureau’s New Home Sales report works. These two metrics tell us what’s already happened in housing.

By contrast, the Pending Home Sales Index tells us what’s coming next.

January’s Pending Home Sales Index reading lifts the monthly metric to its highest level since April 2010 — the month during which the 2010 federal home buyer tax credit expired — foreshadowing a strong housing market through March and April 2012, at least.

This should not be news, of course. The nation’s home builders have said “foot traffic” is rising and home supplies are scarce nationwide. The only wild-card for housing is the high contract cancellation rate.

As compared to last January when just 9 percent of home purchase contracts “failed”, this January saw 33 percent of contracts fail. High failure rates undermine the Pending Home Sales Index’s viability as a forward-looking housing market indicator.

Despite contract failures, though, the combination of low mortgage rates and low home prices is enticing to today’s home buyers. Expect home sales to climb in the coming weeks which will lead to a strong spring season for housing. 

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Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes


More Housing Strength : Pending Home Sales Surged In October

Pending Home Sales 18 Months Ending October 2011

If you’re waiting for home prices to reach its bottom, you may have missed your window.

After 3 consecutive months of easing, the Pending Home Sales Index jumped 10 percent in October, lending credence to the belief that housing is in recovery.

The Pending Home Sales Index is a monthly publication from the National Association of REALTORS®. It measures the number of homes under contract to sell nationwide. October’s reading is the highest for all of 2011, and the second-highest dating back to April 2010.

April 2010 was the last month of the last year’s federal home buyer tax credit.

For buyers and sellers in Mesa and nationwide, the Pending Home Sales Index is a housing metric worth watching. Different from the Existing Home Sales and New Home Sales reports which report on “the past”, the Pending Home Sales Index is a forward-looking housing market indicator.

According to the National Association of REALTORS®, 80% of homes under contract close within 2 months.

The majority of the rest close within Months 3 and 4.

The spike in October’s Pending Home Sales Index, therefore, foretells a strong Existing Home Sales report for November and December. Not that we should be surprised! Home builders have been telling us for weeks that the market is strengthening, and that home supplies are at multi-year lows.

The only wild-card is the market’s out-sized contract failure rate. One in three pending home sales failed to close in October — nearly double the rate of the month prior and 4 times the rate of October 2010. Should this high failure rate continue, the Pending Home Sales Index’s role as a forward-looking indicator would be muted.

Overall, though, new buyer demand for housing accompanied a smaller home supply will result in higher home prices through 2012. And, with mortgage rates expected to rise, monthly carrying costs will be higher, too.

Looking at the data, the best time to buy a home may be right now.

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Pending Home Sales Index Slips For 4th Straight Month

Pending Home SalesNationwide, fewer homes are going under contract to sell.

According to the National Association of REALTORS®, the Pending Home Sales Index fell 5 percent last month. September marks the fourth consecutive month in which the index has dropped. 

The Pending Home Sales Index is a monthly index which measures the number of homes under contract to sell, but not yet closed. As such, it’s among the few “forward-looking” housing indicators; a data set meant to predict future home sales. 

80% of homes under contract close within 2 months so, if the September Pending Home Sales Index is to be believed, we should expect home sales to decline through October and November. 

And that’s before we account for cancelled contracts.

Also from the National Association of REALTORS®, we learn that 18 percent of homes under contract failed to close in September. This is double the failure rate from September 2010 and it, too, should drag Existing Home Sales volume lower this fall.

On a seasonally-adjusted, regional basis, the Pending Home Sales Index fell everywhere. 

  • Northeast Region: -4.7% from August
  • Midwest Region : -6.2% from August
  • South Region : -5.5% from August
  • West Region : -2.1% from August

For home buyers and sellers in Phoenix , though, regional data remains too broad to be useful. Housing markets are local, meaning that each block on each street on each city has its own distinct economy. When 9 states are grouped into a single “region”, it’s neither helpful nor relevant to people making buy/sell decisions.

That said, the Pending Home Sales Index remains important because it’s about housing, and housing is a keystone of the U.S. economic recovery.

The market looks ideal for buyers. Home prices are rising, but slowly; and mortgage rates remain near rock-bottom levels. Home affordability is high and should remain that way for the next few weeks.

If you’re shopping for a home, it’s an excellent time to go under contract.

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Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Real Estate Websites | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes