Market Recap: Home Price Appreciation Slows, Pending Home Sales Rebound
Average mortgage rates trended slightly upward this week, but still remain close to year-long lows. The S&P CoreLogic Case-Shiller home price index was unchanged from June to July, and the Federal Housing Finance Agency (FHFA) house price index increased slightly. Pending home sales increased.
The Case-Shiller home price index was unchanged from June to July, and up only 2.0% year-over-year. 14 of the 20 cities measured saw increases, led by Phoenix and Las Vegas up 5.8% and 4.7% respectively. The breakneck pace of home price appreciation has petered out and prospective home buyers will likely see consistent pricing this Fall.
The FHFA house price index appreciated a surprising 0.4% month-over-month and 5.0% year-over-year in July, surpassing gains reported by the Case-Shiller home price index. The FHFA house price index reports on a smaller data subset, limited to homes financed through conventional mortgage loans. Gains were propelled by the Mountain states, up 7.6% annually.
The pending home sales index increased 1.6% month-over-month and 2.5% year-over-year in August. Home buyers are getting back into the housing market as mortgage rates stay low. National Association of Realtors’ chief economist Lawrence Yun commented on the favorable data, specifically in western states, “The notable sales slump in the West region over recent years appears to be over. Rising demand will reaccelerate home price appreciation in the absence of more supply.”
Many housing professionals are expecting a busy Fall, with lower mortgage rates and an overall slowdown in home price appreciation. Although Spring and Summer are historically busier months, the recent drop in mortgage rates may keep buyers coming out through the end of the year. If you’re shopping for a home this Fall, get preapproved for a home loan first. Mortgage preapproval shows the seller you’ve already started the home financing process and can ensure a faster transaction.
Sources: CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily