Market Recap: Home Price Appreciation Gainful, but Slower. Pending Home Sales Decline
Average mortgage rates continued their downward trend this week. Both the S&P CoreLogic Case-Shiller home price index and the Federal Housing Finance Agency (FHFA) house price index indicated that home price appreciation is also slowing down. Pending home sales are down.
The Case-Shiller home price index posted the weakest gains in seven years, a good sign for prospective home buyers. From February to March, the index appreciated 0.1%. Annually, the index is up just 2.7%. No cities posted double-digit annual gains. Las Vegas and Phoenix had the most significant rates of annual appreciation up 8.2% and 6.1% respectively. All metros were gainful month-over-month, except New York, down 0.1% month-over-month.
The FHFA house price index also appreciated 0.1% from February to March. Annually, gains were more substantial, up 5.0% year-over-year. The data corroborates the Case-Shiller home price index, home price appreciation has slowed nationwide after several red-hot years.
The pending home sales index weakened in April, down 1.5% month-over-month, and 2% year-over-year, despite March’s gains. The trend will likely not persist into the summer, especially with such positive housing market conditions. The National Association of Realtors chief economist explained, “though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising. It’s inevitable for sales to turn higher in a few months.”
Lower mortgage rates and a slowdown in home price appreciation could give some home buyers a much needed break. The current environment will likely also spur more home buying activity, that could lead to a competitive market this summer. If you are one of those prospective home buyers looking to buy while rates and prices are low, get preapproved for financing before you start shopping. Mortgage preapproval shows the home seller you can ensure an expeditious transaction and you’re serious about buying their home.
Sources: CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily