Existing-home sales lost momentum in July and decreased year-over- year for the first time since November 2015, according to the National Association of Realtors®.
Total existing home sales, which are completed transactions fell 3.2 percent to an annual rate of 5.39 million in July from 5.57 million in June. For only the second time in the last 21 months sales are now below a year ago.
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country,” he said. “Realtors® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
The median existing-home price for all housing types in July was $244,100, up 5.3 percent from July 2015 ($231,800). July’s price increase marks the 53 rd consecutive month of year- over-year gains.
The share of first-time buyers was 32 percent in July, up from 28 percent a year ago. First- time buyers represented 30 percent of sales in all of 2015.
According to Freddie Mac, the average interest rate for a 30-year, conventional, fixed-rate mortgage dropped from 3.57 percent in June to 3.44 percent in July.
Since the 2015 implementation of the Consumer Financial Protection Bureau’s ‘Know Before You Owe’ mortgage initiative, over challenges in gaining access to the mortgage “closing disclosure” form, or CD. The CD is delivered to homebuyers in advance of their closing and contains important financial information related to their purchase. Unfortunately, many lenders have chosen to withhold this document from real estate agents since Know Before You Owe went into effect, despite a longstanding tradition of sharing similar information.
The Consumer Finance Protection Bureau announced that it is usual, accepted and appropriate for creditors and settlement agents to provide a closing disclosure to consumers, sellers and their real estate brokers or other agents.
The National Association of Realtors® believes this announcement marks significant progress for consumers, as well as for its members. Giving Realtors® access to the CD would strengthen consumers’ understanding of their mortgage and home purchase by helping agents continue to provide expert advice to their clients.
Tom Salomone, NAR President said, “Realtors® have reported challenges gaining access to the Closing Disclosure… despite a long history of access to the substantively similar HUD-1 that is replaced. The CFPB acknowledged that concern by making it clear that it is appropriate and accepted for creditors and settlement agents to share the CD with consumers, sellers and their real estate agents.”
Home prices maintained their robust, upward trajectory in a vast majority of metro areas during the second quarter, causing affordability to slightly decline despite mortgage rates hovering at lows not seen in over three years, according to the latest quarterly report by the National Association of Realtors®. The report also revealed that for the first time ever, a metro area – San Jose, California – had a median single-family home price above $1 million.
Lawrence Yun, National Association of Realtors chief economist, says a faster pace of home sales pushed home prices higher in most metro areas during the second quarter. “Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities.”
The national median existing single-family home price in the second quarter was $240,700, up 4.9 percent from the second quarter of 2015 ($229,400).
At the end of the second quarter, there were 2.12 million existing homes available for sale 3 , which was below the 2.25 million homes for sale at the end of the second quarter in 2015. The average supply during the second quarter was 4.7 months – down from 5.1 months a year ago.
Boosted by a greater share of sales to first-time buyers not seen in nearly four years, existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May.
After last month’s gain, sales are now up 3.0 percent from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).
Lawrence Yun, NAR chief economist, says the impressive four month streak of sales gains through June caps off a solid first half of 2016 for the housing market. “Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home…” he said. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.” Cautions Yun, “Looking ahead, it’s unclear if his current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing.”
The median existing-home price 2 for all housing types in June was $247,700, up 4.8 percent from June 2015 ($236,300). June’s price increase marks the 52 and consecutive month of year-over- year gains and surpasses May’s peak median sales price of $238,900.
For the second consecutive week, fixed mortgage rates inched up, but still remain near historical lows, Freddie Mac reports in its weekly mortgage market survey.
“The 10-year Treasury yield remained flat this week in anticipation of the Fed’s July policy meeting,” says Sean Becketti, Freddie Mac’s chief economist. Mortgage rates, on the other hand, rose another 3 basis points to 3.48 percent. Nonetheless, home sales continue to benefit from the persistently low mortgage rates with June’s new home sales coming in at an annualized rate of 592,000 homes — its fastest pace since 2008.”
Freddie Mac reports the following national averages for mortgage rates for the week ending July 28:
· 30-year fixed-rate mortgages: averaged 3.48 percent, with an average 0.5 point, rising from last week’s 3.45 percent average. Last year at this time, 30-year rates averaged 3.98 percent.
· 15-year fixed-rate mortgages: averaged 2.78 percent, with an average 0.5 point, increasing from last week’s 2.75 percent average. Last year at this time, 15-year ARMs averaged 3.17 percent.
· 5-year hybrid adjustable-rate mortgages: averaged 2.78 percent, with an average 0.5 point, holding steady from last week. A year ago, 5-year ARMs averaged 2.95 percent.