This Week in Real Estate: May 30, 2017


As you celebrate the remainder of this holiday weekend I encourage you to pause at some point over the next two days to honor and remember all the men and women that made the ultimate sacrifice in service to our country.

Favorable news This Week in Real Estate in two of the most influential lead indicators of a real estate market: employment and interest rates. Interest rates hit the lowest level of 2017 this week and the jobless rate is at a 10-year low. Below are a few highlights from the fourth week of May that influence our business:

* Existing-Home Sales Slip 2.3 Percent in April; Days on Market Falls to Under a Month. Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors. Total existing-home sales dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month’s decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year. “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” said Lawrence Yun, NAR chief economist. Total housing inventory at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago and surpasses last May (32 days) as the shortest timeframe since NAR began tracking in May 2011. Inventory data from reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose, CA (23 days), San Francisco, CA (25 days), Denver (27 days) and Seattle-Tacoma-Bellevue, WA (28 days). Matching the highest percentage since last September, first-time buyers were 34 percent of sales in April.
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* Mortgage Rates Drop to Lowest of 2017. Freddie Mac released the results of its Primary Mortgage Market Survey on Thursday showing average mortgage rates hitting their lowest mark of the year. “As we predicted, the 30-year mortgage rate fell 7 basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields,” says Sean Becketti, Freddie Mac’s chief economist. The 30-year fixed-rate mortgage averaged 3.95 percent, with an average 0.5 point, falling from last week’s 4.02 percent average. Last year at this time, 30-year rates averaged 3.64 percent. The 15-year fixed-rate mortgage averaged 3.19 percent, with an average 0.5 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 2.89 percent. A 5-year hybrid adjustable-rate mortgage averaged 3.07 percent, with an average 0.4 point, dropping from last week’s 3.13 percent average. A year ago, 5-year ARMs averaged 2.87 percent.
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* Jobless Claims Rose Slightly, but Four-Week Average is at a 44-Year Low. The number of Americans filing for unemployment benefits rose less than expected last week and the four-week moving average of claims fell to a 44-year low, suggesting further tightening in the labor market. It was the 116th straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a 10-year low of 4.4 percent. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 5,750 to 235,250 last week, the lowest level since April 1973. The four-week moving average of continuing claims dropped 16,000 to 1.93 million, the lowest level since January 1974.
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Have a productive week!

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