This Week in Real Estate: May 2, 2016

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The FOMC chose not to increase interest rates This Week in Real Estate, yet homeownership is near historic lows. Below are a few highlights from the last week of April that influence our business:

* Pending Home Sales Jump to Highest Level in Nearly a Year. Overcoming several roadblocks in housing, pending home sales managed to increase in March for the second consecutive month, reaching their highest level in almost a year, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator based on contract signings, grew 1.4% to 110.5 in March from a downwardly revised 109.0 in February. This is also 1.4% above March 2015 (109.0). With this new reading, the index has increased year-over-year for 19 consecutive months and is at its highest reading since May 2015 (111.0). Broken up regionally, “Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38% in the past three years,” said Lawrence Yun, NAR chief economist. “As a result, pending sales in the region have now declined in four of the last five months and are lower than one year ago for the third month in a row. Closed sales in the region in March were also below last year’s pace,” he added.
Full Story…  http://www.housingwire.com/articles/36897-pending-home-sales-jump-to-highest-level-in-nearly-a-year?eid=322520585&bid=1388864

* As Expected, Fed Holds Off Interest-Rate Hike. Just as many predicted, the Federal Open Market Committee, the group that sets the benchmark interest rate for bank lending, elected this week to hold steady and not increase federal funds rate. “A range of recent indicator, including strong job gains, points to additional strengthening of the labor market,” the FOMC said in its official statement. “The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the FOMC said.
Full Story…  http://www.housingwire.com/articles/36899-as-expected-fed-holds-off-on-interest-rate-hike?eid=322520585&bid=1388864

* Homeownership Near its Lowest in History. After gains in the second half of 2015, the homeownership rate fell to just 63.6 percent, seasonally adjusted, in the first quarter of this year, according to the U.S. Census Bureau. Homeownership hit a high of 69.4 percent in 2004, during one of the biggest housing booms in history. That was also when mortgage lending was arguably at its loosest level in history. The homeownership rate is now just one-tenth of 1 basis point higher that its all-time low in the second quarter of 2015. Economists continue to point to a recovering job market as fuel for growth in the housing market, but for young Americans, just having a job does not translate to homeownership. High levels of student loan debt, tight mortgage underwriting standards and overheating home prices are all contributing to very low homeownership rates among the nation’s youngest workers. Homeownership among those aged 25-34 today is nearly 10 percentage points lower than it was a decade ago. First-time homebuyers are still barely 30 percent of today’s buyers; traditionally, they compromise 40 percent of homebuyers.
Full Story…  http://www.mortgagenewsdaily.com/04282016_homeownership_near_its_lowest_in_history.asp
Have a productive week!
Jason

 

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