Blog posted On May 22, 2017
Mortgage rates trended downward last week, amidst some political turmoil in Washington. This week, there will be some significant reports on the first numbers from second quarter including new home sales and existing home sales. The Federal Housing Finance Agency (FHFA) will release its house price index, also.
New home sales measure the sales of newly constructed homes. In March, new home sales reached a level of 621,000, an 8-month high. Inventory constraints will remain a problem as demand continues to outpace supply. Builders are facing their own challenges with labor and material shortages.
The FHFA house price index tracks changes in the value of homes financed through conventional mortgages backed by Fannie Mae and Freddie Mac. This data lags one month and excludes government-insured mortgages like FHA, VA, or USDA. In February, the FHFA house price index appreciated 0.8% month-over-month and 6.4% year-over-year.
Existing home sales track the sale of previously owned homes. Existing home sales constitute the majority of real estate transactions and are the most telling gauge of housing market activity. In March, existing home sales improved 4.4% month-over-month to a rate of 5.710 million, the highest level since 2007.
Low mortgage rates and a competitive market are leading toward a heated home buying season. With record numbers last month, this week’s reports will indicate whether the strength will continue.