Blog posted On July 20, 2020
Average mortgage rates have touched the lowest levels in the past 12 months last week. This week, the Federal Housing Finance Agency (FHFA) will release its house price index. Existing home sales and new home sales are also scheduled for release.
The FHFA house price index tracks changes in the value of homes financed through conventional mortgage loans securitized by Fannie Mae and Freddie Mac. Though the data subset is smaller than that of the Case-Shiller home price index, it is still used to gauge home price appreciation trends. The FHFA house price index appreciated 0.2% month-over-month and 5.5% year-over-year.
Existing home sales, or resales, make up the majority of real estate transactions. Resales declined in May, down 9.7% month-over-month and 26.6% year-over-year, to a seasonally adjusted annualized rate of 3.91 million units. Although mortgage rates are historically low, buyers are competing over a limited number of homes for sale, especially now with some sellers choosing to delay selling their home because of the pandemic.
New home sales make up approximately 10% of real estate transactions. In May, new home sales increased 16.6% month-over-month and 12.7% year-over-year, to a seasonally adjusted annualized rate of 676,000 units.
This week’s reports will reveal whether home buyers are returning to the market and taking advantage of historically low mortgage rates. If you’re interested in buying a home this summer, it’s best to start the mortgage process early and get prequalified.
Sources: Advisor Perspectives, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily