Market Recap: Gains All Around with Existing Home Sales, New Home Sales, and FHFA House Price Index
Mortgage rates stayed low this week, trending downward according to Mortgage News Daily, despite the June rate hike. The final numbers from the spring selling season were mostly positive, with existing home sales and new home sales rebounding and the Federal Housing Finance Agency (FHFA) house price index also improving.
Existing home sales make up the majority of real estate transactions. Limited housing inventory has edged prices up and shortened time on the market. In May, existing home sales increased 1.1% month-over-month after declines in April, to a level of 5.62 million. Year-over-year, sales are up 2.7%. National Association of Realtors chief economist Lawrence Yun said in a statement, “Homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.” 55% of homes were sold at or above the listing price.
New home sales track the number of newly-constructed homes sold. New home sales also turned around this month, up 2.9% month-over-month and 8.9% year-over-year to a level of 610,000. The median sales price of a new home is up to $345,800 in May from $310,200 in April. Based on the current sales pace, it would take 4.6 months to exhaust available supply.
The FHFA house price index tracks changes in the value of homes financed through conventional mortgages backed by Fannie Mae and Freddie Mac. In April, the FHFA house price index increased 0.7% month-over-month and 6.8% year-over-year. Gains were driven by the Mountain and Southern regions up 8.9% and 8.0% year-over-year, respectively. The typically leading Pacific region weakened, up 7.5% year-over-year. The Mid-Atlantic and New England region are up 5.5% and 5.3% year-over-year, respectively.
Housing market activity has increased as rates remain low and available inventory is limited. House prices are appreciating and time on the market is decreasing, with more than half of homes selling at or above listed prices.
Sources: Bloomberg, Builder Magazine, MarketWatch, Mortgage News Daily, US News and World Report