• Kevin Long
  • News
  • Market Forecast: FHFA House Price Index, Existing Home Sales, and New Home Sales

Market Forecast: FHFA House Price Index, Existing Home Sales, and New Home Sales

  • January 22, 2018

Mortgage rates trended upward last week, reacting to the end-of-year rate hike.  This week, the Federal Housing Finance Agency (FHFA) releases its house price index.  The existing home sales report comes out on Wednesday and the new home sales report comes out Thursday.

The FHFA house price index tracks the changes in value of homes financed through conventional mortgages securitized by Fannie Mae and Freddie Mac.  The data excludes homes financed through government-sponsored loans like the VA and FHA loans.  Though the data lags by one month and surveys a smaller sample than the Case-Shiller home price index, it is used to evaluate home price appreciation trends.  In October, the index appreciated 0.5% month-over-month and 6.6% year-over-year.  Home prices have steadily increased as limited inventory creates a competitive buying market.

Existing home sales or resales track the sales of previously constructed homes and make up the majority of real estate transactions.  In November, existing home sales increased 5.6% month-over-month and 3.8% year-over-year to a seasonally adjusted annual rate of 5.810 million.

The new home sales report tracks changes in the sales of newly constructed homes.  In December, new home sales saw unprecedented gains, up 17.5% month-over-month to a seasonally adjusted annual rate of 733,000.  This record figure was the fastest pace in over 25 years. 

Zillow senior economist, Aaron Terrazas explained, “the market is starving for new homes, but it won’t be easy for builders struggling with high and rising land, labor, and lumber costs.” 

One demographic hit particularly hard by limited inventory is first-time home buyers.  There is a lack of starter homes available, with Baby Boomers choosing to stay in their homes longer leaving Generation X homeowners stuck in their starter homes.  New home construction has not yet been able to satisfy the demand for starter homes, since builders are opting to build more profitable larger and luxury homes.  


Sources: Bloomberg, CNBC, MarketWatch, Mortgage News Daily

Kevin Long
Area Sales Manager
NMLS # 195255
Branch NMLS # 1108042

Kevin Long

PHONE: (615) 567-8901

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).