This Week in Real Estate: Aug. 15, 2016

Increases are the theme This Week in Real Estate; among them—homebuyer confidence, mortgage credit availability and prices. Below are a few highlights from the second week of August that influence our business:

* Home-Price Gains Continue to Rise. Home prices maintained their robust, upward trajectory in a vast majority of metro areas during the second quarter, causing affordability to slightly decline despite mortgage rates hovering at lows not seen in over three years, according to the latest quarterly report by NAR. The median existing single-family home price increased in 83% of measured markets. There were slightly fewer rising markets in the second quarter compared to the first three months of this year, when price gains were recorded in 87% of metro areas. Twenty-five metro areas in the second quarter experienced double-digit increases – a small decrease from the 28 metro areas in the first quarter. A year ago, 34 metro areas experienced double-digit price gains. The median existing single-family home price in the West increased 6.5 percent to $346,500 in the second quarter from the second quarter of 2015.
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* Homebuyer Confidence Rises in July. Home purchase sentiment reached an all-time survey high in July, an indication that Americans are feeling more upbeat about the housing market, according to Fannie Mae. Fanne Mae’s Home Purchase Sentiment Index (HPSI) increased 3.3 points to 86.5 in July. Each of the index’s six components – including selling outlook and personal finances – also rose last month. The share of consumers who said they would buy if they were going to move climbed to 67 percent, while the share of consumers who said they would rent dropped to 26 percent, an all-time survey low. “One interesting potential bright note for housing in the July survey is that younger households may finally be shifting toward buying rather than renting in greater numbers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
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* Mortgage Credit Availability Increases in July. Mortgage credit availability increased in July according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA). The MCAI increased 1.0 percent to 165.3 in July. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. Of the four component indices, the Jumbo and Government MCAIs saw the greatest increase in availability (both up 1.3 percent) over the month followed by the Conventional MCAI (up 0.7 percent), and the Conforming MCAI (up 0.1 percent).
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* Foreclosure Inventory Finally Back to Housing-Boom Levels. The foreclosure inventory declined by 25.9 percent and completed foreclosures declined by 4.9 percent compared with June 2015, according to CoreLogic’s recently released June 2016 National Foreclosure Report. The number of completed foreclosures nationwide decreased year-over-year from 40,000 in June 2015 to 38,000 in June 2016, representing a decrease of 67.5 percent from the peak of 117,835 in September 2010. The June 2016 foreclosure inventory rate is the lowest for any month since August 2007. “The impact of the inexorable reduction over the past several years in both foreclosure trends and serious delinquencies is driving the long-awaited return to more historic norms for the U.S. housing market,” says Anand Nallathambi, president and CEO of CoreLogic.
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Have a productive week!

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