Market Recap: FHFA House Price Index Unchanged, Existing Home Sales Down, New Home Sales Up
Mortgage rates continued to trend downward this week. There was a mixed bag of housing news. The Federal Housing Finance Agency (FHFA) house price index was unchanged, existing home sales dropped, and new home sales increased.
The FHFA house price index measures any change in the prices of homes backed by Fannie Mae and Freddie Mac. This index excludes homes financed through FHA, VA, or other government-insured loans. In January, the index showed no month-over-month change. The year-over-year appreciation is down 5 tenths of a percent from December’s reading to a 5.7% rate of appreciation. Despite the January slowdown, numbers remain strong. Next week’s Case-Shiller house price index will provide a more composite view of home price appreciation.
Existing home sales dropped in February, down 3.7% to an annualized rate of 5.480 million. Single-family home sales are down 3.0% and condos are down 9.2%. On a year-over-year basis, however, existing home sales are up a substantial 5.4%. At this time, it would take 3.8 months to sell off available inventory, the lowest in any February since 1999. Days on the market dropped to an average of 45 days compared to last year’s 59 days. National Association of Realtors (NAR) chief economist Lawrence Yun noted that housing demand remains “surprisingly resilient” despite inventory restrictions and rising rates.
In contrast, new home sales climbed to the second-highest reading since early 2008 to an annual rate of 593,000. New home sales are up 6.1% from February to January and are up 12.8% on a year-over-year basis. The median sales price was down 3.9% month-over-month to $296,200. Lower prices and warmer weather may have triggered sales.
Since the Federal rate hike, mortgage rates have trended downward. The economic certainty of the rate hike might have subsided any rate volatility leading up to the Federal Open Market Committee meeting.
Sources: Bloomberg, MarketWatch, MarketWatch, Mortgage News Daily