Market Update | Mortgage Outlook

posted on May 17th, 2016 | filed under: Buying Strategies, Market Update, NoCo SD Market Conditions, Uncategorized

Trends at a glance - May 2016Economic Data Fosters Rate Fade

Now in the valley between the last and the next Federal Reserve meeting, financial markets must study and react to new inbound data about the economy and inflation. As such, mortgage and other interest rates will be pushed and pulled, fully dependent upon both individual items and the collective tenor of the mass.

Provided the needle doesn’t run very hot for very long (a happenstance we’ve not seen in a good long while) nor show the kind of weakness that could point to deflation or even an economic downturn, interest rates can really only run in a range, at times tending to the bottom of it, and at other times, more toward the top. Middling or mixed data will leave us, well, in the middle somewhere.

With no signal of acceleration, mortgage rates have settled back, edging closer to 2016 lows. To get them off the floor, we will need to see a sustained period of warmer data, which would in turn engender an increasing likelihood of a Fed move in June. At the moment, there’s little to support this, but there is still time before the data comes into focus.

HSH.com’s broad-market mortgage tracker – our weekly Fixed-Rate Mortgage Indicator (FRMI) — found the overall average rate for 30-year fixed-rate mortgages declined by six basis points (.06%), to an average rate of 3.70%. The FRMI’s 15-year companion didn’t follow in lockstep, but instead shed the same five basis points it added a week ago, returning to an average 3.07% for the period. Popular with first time homebuyers, rates on fully-insured FHA-backed 30-year FRMs remain considerably below their Fannie and Freddie counterparts but decreased only half as much, with a three basis point decline trimming the average interest rate to 3.53%. Meanwhile, the overall 5/1 Hybrid ARM declined by six one hundredths of one% to fall to 2.91% for the week.

The settling back of mortgage rates to about levels seen in the last “sweet spot” between Fed meetings will probably persist. The pattern of the last three Fed meetings suggests firming mortgage rates in advance and softening ones after the event, for at least a few weeks… before firming in advance of an upcoming meeting again. We’re on the downward side at the moment, but there is not much more space for them to fall at present, perhaps just a couple of basis points or so.

 

APRIL SALES STATISTICS

SINGLE-FAMILY HOMES

Year-Over-Year

  • Median home prices increased by 7.9% year-over-year to $545,000 from $505,000.
  • The average home sales price rose by 8.9% year-over-year to $695,016 from $638,334.
  • Home sales fell by 3.7% year-over-year to 2,306 from 2,395.
  • Total inventory* fell 4.7% year-over-year to 8,640 from 9,066.
  • Sales price vs. list price ratio rose by 0.2% year-over-year to 98.4% from 98.2%.
  • The average days on market fell by 17.6% year-over-year to 37 from 44.
  • Month-Over-Month
  • Median home prices improved by 2.8% to $545,000 from $530,000.
  •  The average home sales price rose by 3.6% to $695,016 from $670,622.
  • Home sales up by 9.9% to 2,306 from 2,098.
  • Total inventory* increased 4.5% to 8,640 from 8,268.
  • Sales price vs. list price ratio increased by 0.3% to 98.4% from 98.1%.
  • The average days on market dropped by 13.2% to 37 from 42.

CONDOMINIUMS

Year-Over-Year

  • Median condo prices increased by 9.0% year-over-year to $375,000 from $344,000.
  • The average condo sales price rose by 7.7% year-over-year to $435,598 from $404,366.
  • Condo sales rose by 4.6% year-over-year to 965 from 923.
  • Total inventory* fell 9.7% year-over-year to 2,964 from 3,284.
  • • Sales price vs. list price ratio rose by 0.7% year-over-year to 98.7% from 98.0%.
  • The average days on market fell by 32.3% year-over-year to 30 from 45.

Month-Over-Month

  • Median condo prices slipped by 0.0% to $375,000 from $375,000.
  • The average condo sales price fell by 2.4% to $435,598 from $446,181.
  • Condo sales up by 15.2% to 965 from 838.
  • Total inventory* increased 3.4% to 2,964 from 2,867.
  • Sales price vs. list price ratio increased by 0.3% to 98.7% from 98.4%.
  • The average days on market dropped by 9.4% to 30 from 33.

* Total inventory is active listings plus contingent or pending listings. Active listings do not include contingent listings.

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posted by Jeff DeChamplain

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Jeff DeChamplain