Last week’s economic news supported recent reports that home sales were fewer and home prices increased, but did so at a slower pace.
The NAR reported a slower pace of existing home sales, and FHFA reported a slower year-over-year rate of growth for home prices on properties financed by Fannie Mae and Freddie Mac.
The U.S. Commerce Department reported that new home sales fell to their lowest level since July 2013. Mortgage rates rose for fixed rate mortgages, but were unchanged for 5/1 adjustable rate mortgages. Here are the details:
Existing Home Sales Slow, Moderate Growth In Home Prices
March sales of existing homes dipped by 0.20 percent according to the NAR. 4.59 million previously owned homes were sold on a seasonally adjusted annual basis against projections of 4.55 million sales and February’s reading of 4.60 million pre-owned homes sold.
Rising home prices contributed to the slowdown in sales, which started last summer. Rapidly rising home prices due to short supplies of available homes and high demand for homes caused some buyers to leave the market. The national average price for existing homes was $198,500 in March, which represented a year-over-year increase of 7.90 percent.
The Federal Housing Finance Agency, which governs Fannie Mae and Freddie Mac, reported that home prices for homes financed with Fannie Mae and Freddie Mac owned mortgages rose by approximately 7.0 percent year-over-year as of February.
Severe winter weather was cited as a possible factor in slowing home sales, but as the peak home buying season gets underway, analysts forecast that some sales lost may be recovered in warmer weather.
Mortgage Rates Rise, New Home Sales At Lowest Level In 21 Months
Freddie Mac reported that average mortgage rates for fixed rate mortgages rose. The rate for a 30-year fixed rate mortgage rose by six basis points to 4.33 percent; the rate for a 15-year fixed rate mortgage also rose by six basis points to 3.39 percent.
The average rate for a 5/1 adjustable rate mortgage was unchanged at 3.03 percent. Discount points were also unchanged at 0.60,.60 and 0.50 percent respectively.
Sales of new single-family homes slumped to their lowest level in since July 2012 according to the U.S. Department of Commerce. The median price of a new single family home rose to $290,000, which represented a 12.60 percent increase year-over-year.
Analysts noted that month-to-month home sales numbers are not as reliable as sales trends measured over months, but 384,000 March sales of new homes fell markedly short of expectations of 450,000 new home sales and February’s upwardly revised reading of 440,000 new homes sold.
Unemployment Ups And Downs Contribute To Buyer Uncertainty
New jobless claims rose to 329,000 against expectations of 315,000 new jobless claims and the prior week’s reading of 305,000 new jobless claims. The Labor Department said that seasonal adjustments were incomplete due to the Easter holiday, which occurs on different dates.
As labor and other sectors of the economy endure ups and downs during the economic recovery, it is reasonable to expect some home buyers to put off buying homes.
This week’s scheduled economic news includes Pending Home Sales, Case-Shiller’s Housing Market Index, the FOMC meeting and statement and Construction Spending. The Bureau of Labor Statistics will release April’s Non-Farm Payrolls Report and National Unemployment Report on Friday.