Market Forecast: Existing Home Sales, Case-Shiller Home Price Index, and New Home Sales
Mortgage rates trended downward last week. There are numerous housing reports scheduled for this week, including last month’s existing home sales and new home sales reports, and May’s Case-Shiller home price index. Last week’s reports showed positive gains in mortgage applications filed, housing starts, and building permits issues. This week’s reports will reflect whether or not that momentum persists.
Existing home sales or resales make up the majority of real estate transactions. Resales track the sales of previously constructed homes. In May, existing home sales improved 1.1% month-over-month and 2.7% year-over-year to a level of 5.580 million. This spring has been noticeably soft for selling.
The S&P CoreLogic Case-Shiller home price index reports on changes in the values of homes that have been involved in two or more sales transactions in 20 major metropolitan areas around the country. In April, the 20-city index appreciated 0.3% month-over-month and 5.8% year-over-year driven by gains in the Pacific Northwest, Dallas, and Denver.
New home sales count the number of sales of newly constructed homes. In May, new home sales increased 2.9% month-over-month and 8.9% year-over-year to a level of 610,000. New home sales have also been somewhat sluggish this spring, but seem to be gaining more momentum.
Mortgage rates have started to drop amidst suggestions that rate hikes will not continue as aggressively this year. The housing market is reflecting the lower rates with reenergized sales numbers.
Sources: Bloomberg, MarketWatch, Mortgage News Daily