Mortgage Rates Stay Within Range

Mortgage rates stayed within the 4 percent range this week, with the 30-year, fixed rate averaging 4.05 percent, according to Freddie Mac's recently released Primary Mortgage Market Survey® (PMMS®.) Rates rose above 4 percent following the presidential election in November, and have fluctuated since.
 
The 15-year, fixed rate, at the same time, averaged 3.29 percent, up from 3.27 percent the week prior, while the 5-year, Treasury-indexed hybrid adjustable rate averaged 3.14 percent, up from 3.13 percent the week prior, according to the survey.
 
"The 10-year Treasury yield jumped eight basis points this week while the 30-year mortgage rate rose three basis points to 4.05 percent," says Sean Becketti, chief economist at Freddie Mac. "Mixed economic reports over the last few weeks have anchored the 30-year mortgage rate around the 4 percent mark."
 
Source: Freddie Mac 

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Home Prices Charge Upward, Stoked by Strong Sales Pace

Home prices continue to escalate, charging upward 6.9 percent in the first quarter of 2017, according to the latest quarterly report by the National Association of REALTORS® (NAR). The increase, stoked by the strongest quarterly sales pace in a decade, marks three straight quarters of growth.
 
"Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter," says Lawrence Yun, chief economist at NAR. "Those able to successfully buy most likely had to outbid others—especially for those in the starter home market—which, in turn, quickened price growth to the fastest quarterly pace in almost two years."
 
Single-family home prices went up in 85 percent of the markets assessed in the report, or 152 of 178 metropolitan statistical areas (MSAs). Seventeen percent of, or 30, metro areas saw prices up by double digits. At the national level, the median existing single-family home price was $232,100, and the median existing condominium price was $218,600.
 
Home prices in the South grew at the highest quarterly rate, 8.8 percent to a median $209,000, according to the report. Prices in the West followed at 8.4 percent to a median $342,500, while prices in the Midwest tracked up 5.7 percent to a median $176,600. Prices in the Northeast grew at the lowest quarterly rate, 2.2 percent to a median $255,000.
 
Affordability, in addition, contracted in the first quarter. A homebuyer with a 5 percent down payment would need an income of $52,251 to afford a single-family home priced at the national median. A homebuyer with a 10 percent down payment would need an income of $49,501, and a homebuyer with a 20 percent down payment would need an income of $44,001.
 
"Several metro areas with the healthiest job gains in recent years continue to see a large upswing in buyer demand but lack the commensurate ramp-up in new-home construction," Yun says. "This is why many of these areas—in particular several parts of the South and West—are seeing unhealthy price appreciation that far exceeds incomes."
 
The most expensive metro areas by median existing single-family price in the first quarter were San Jose, Calif. ($1,070,000); San Francisco, Calif. ($815,000); Anaheim-Santa Ana, Calif. ($750,000); Honolulu, Hawaii ($746,000); and San Diego, Calif. ($564,000). The least expensive metro areas were Youngstown-Warren-Boardman, Ohio ($79,200); Cumberland, Md. ($81,800); Decatur, Ill. ($86,100); Elmira, N.Y. ($90,000); and Binghamton, N.Y. ($91,200).
 
Existing-home sales, including condo, rose 1.4 percent to 5.62 million in the first quarter, according to the report—the highest since the first quarter of 2007. Existing homes available for sale were down 6.6 percent to 1.83 million at the end of the quarter, with an average supply of 3.7 months.
 
"Last quarter's robust pace of sales was especially impressive considering the affordability sting buyers experienced from higher prices and mortgage rates," says Yun. "High demand is poised to continue heading into the summer as long as job gains continue; however, many metro areas need to see a significant rise in new and existing inventory to meet this demand and cool down price growth."
 
For more information, please visit www.nar.realtor.

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Home Prices Exceed Expectations at Repeat All-Time High

Home price growth in February bested analyst predictions, expanding 5.8 percent in the latest S&P Corelogic Case-Shiller Indices.
 
Prices rolled along to a 32-month high in the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, increasing from 5.6 percent the month prior. The Index's 10-City Composite rose 5.2 percent, while its 20-City Composite rose 5.9 percent. The 10-City Composite shows an increase from 5 percent the month prior; the 20-City Composite, an increase from 5.7 percent the month prior. Month-over-month, the 10-City Composite rose 0.3 percent and the 20-City Composite rose 0.4 percent.

Of the 20 cities analyzed, Dallas, Texas, overtook recurring top three-ranked Denver, Colo., with prices up 8.8 percent. Portland, Ore., and Seattle, Wash., remained in the top three, with prices up 9.7 percent in Portland and up 12.2 percent in Seattle. The majority of cities analyzed showed higher increases than what was observed the month prior.
 
According to S&P Dow Jones Indices Index Committee Chairman and Managing Director David M. Blitzer, the price parade will keep marching on so long as supply trails demand.
 
"Housing and home prices continue to advance," said Blitzer in a statement. "The S&P Corelogic Case-Shiller National Home Price Index and the two composite indices accelerated since the national index set a new high four months ago. Other housing indicators are also advancing, but not accelerating the way prices are. As per National Association of REALTORS®, sales of existing homes were up 5.6 percent in the year ended in March. There are still relatively few existing homes listed for sale and the small 3.8-month supply is supporting the recent price increases.
 
"Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates," Blitzer said. "Housing's strength and home-building are important contributors to the economic recovery. Housing starts bottomed in March 2009 and, with a few bumps, have advanced over the last eight years. New-home construction is now close to a normal pace of about 1.2 million units annually, of which around 800,000 are single-family homes.
 
"Most housing rebounds following a recession only last for a year or so," said Blitzer. "The notable exception was the boom that set the stage for the bubble. Housing starts bottomed in 1991, drove through the 2000-2001 recession, and peaked in 2005 after a 14-year run."
 
Source: S&P Dow Jones Indices

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Just In: Renters Can Buy a Home—Without Spending More Money

Rents are so high that the average renter could buy a home worth approximately 50 percent more than the median home value without spending any more money, according to a recent analysis by Zillow.
 
The national median rent, $1,416, is enough to cover the monthly expense (including insurance, maintenance and taxes) of owning a home worth $289,505—considerably more than the national median home value of $196,500.
 
Similar outcomes shake out in the majority of cities analyzed:
 


 
"Renters hesitant to enter the home-buying market for fear of not being able to find an affordable home should be encouraged to discover they may have more options than they thought," says Dr. Svenja Gudell, chief economist at Zillow.
 
"However, it's worth noting that many of the more affordable homes for sale may be older, smaller and/or located in less-desirable neighborhoods than they might like," Gudell says. "The decision between buying and renting is a financial trade-off between saving more each month on a mortgage payment versus spending more on rent, but taking advantage of the location and lifestyle amenities urban renting often offers."
 
Scraping together enough for a down payment is another issue—though lesser now that rents are losing steam.
 
"Recent slowdowns in rent growth may take some of the edge off for renters saving to become homeowners," says Gudell. "This is good news, since saving a down payment, qualifying for a loan and finding a home available at a manageable price remain hurdles for millions of aspiring buyers."
 
For more information, please visit www.zillow.com

For more real estate information, including a FREE Home Market Analysis and Market Area Statistics, please contact us at 866-977-7623.

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