Market Recap: Home Values Up, New Home Sales Down, Pending Home Sales Fall
It was a short week this week, with markets closed on Thursday in observance of the Thanksgiving holiday. Home price appreciation has started to pick up. New home sales and pending home sales both declined month-over-month, but climbed year-over-year.
In September, home price appreciation picked up slightly. The 20-city Case-Shiller home price index appreciated 0.4% month-over-month and 2.1% year-over-year. Smaller cities powered gains. Specifically, Boise, ID and Tucson, AZ posted double digit annual gains. As home buyers expand their search from high-cost areas, they are putting upward pressure on prices elsewhere.
New home sales slipped slightly in October, down 0.7% month-over-month to a seasonally-adjusted annual rate of 733,000. Annually, however, new home sales are up a significant 31.6%. Regionally, the data was mixed. The West and Midwest increased but the Northeast and South decreased.
Pending home sales or homes that are under contract and not yet sold, declined 1.7% from September to October. However, annually, sales are up 4.4%. Although buyer demand is at a record high and mortgage rates are near year-long lows, supply is low. Lawrence Yun, chief economist at the National Association of Realtors (NAR) commented, “there is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.”
Approximately two-thirds of the homes sold in October were either currently under construction or not yet started, suggesting buyers are buying new, especially in inventory-strained markets. When you buy a new home, be sure to work with a lender that has experience working with builders. We offer temporary rate locks and float downs for certain new construction situations to ensure you close on your new home with no surprises.
Sources: CNBC, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily