This Week in Real Estate: August 28, 2017


As the summer selling season quickly approaches its end, we are setting the stage for the fall cycle with favorable news. With continued home price appreciation, consumer confidence rises to the highest level since the beginning of the year and the 30-year mortgage rate reaches a new 2017 low. Below are a few highlights from the fourth week of August that influence our business:

* Consumer Confidence Rises to Highest Level Since January. Consumers became more confident during the first half of August than at any point since January, according to the Survey of Consumers conducted by the University of Michigan. The Index of Consumer Sentiment jumped 4.5% from last month’s 93.4 to 97.6 at the beginning of August. This is also up 8.7% from 89.8 in August 2016.
“Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects,” Survey of Consumers Chief Economist Richard Curtin said. “The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound,” Curtin said. “As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017.”
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* Home Prices Jump 6.2% in Second Quarter; Eclipse 2016 High. The national median existing single-family home price in the second quarter was $255,600, which is up 6.2 percent from the second quarter of 2016 ($240,700) and surpasses the third quarter of last year ($241,300) as the new peak quarterly median sales price. The median price during the first quarter increased 6.9 percent from the first quarter of 2016. Single-family home prices last quarter increased in 87 percent of measured markets, with 154 out of 178 metropolitan statistical areas(MSAs) showing sales price gains in the second quarter compared with the second quarter of 2016. Twenty-three areas (13 percent) recorded lower median prices from a year earlier. Total existing-home sales, including single family and condos, slipped 0.9 percent to a seasonally adjusted annual rate of 5.57 million in the second quarter from 5.62 million in the first quarter, but are still 1.6 percent higher than the 5.48 million pace during the second quarter of 2016. In the West, existing-home sales decreased 3.7 percent in the second quarter but are 3.1 percent above a year ago. The median existing single-family home price in the West increased 7.5 percent to $372,400 in the second quarter from the second quarter of 2016.
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* 30-Year Mortgage Rate Hits 2017 Low. Mortgage rates decreased for the fourth consecutive week and the 30-year mortgage hit a new low for 2017, according to Freddie Mac’s Primary Mortgage Market Survey. “The 30-year mortgage rate also declined for the fourth consecutive week, dropping three basis points to a new year-to- date low of 3.86%,” Freddie Mac Chief Economist Sean Becketti said. The 30-year fixed-rate mortgage dropped to 3.86% for the week ending August 24, 2017. This is down from last week’s 3.89% but up from 3.43% last year. The 15-year FRM held steady at 3.16%, an increase from last year’s 2.74%. The five-year Treasury-indexed hybrid adjustable-rate mortgage increased slightly, hitting 3.17%. This is up from 3.16% last week but down from 2.75% last year. “The 10-year Treasury yield fell six basis points this week amid concerns over lagging inflation,” Becketti said.
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Have a productive week!


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