Housing market data in recent weeks has shown signs of stabilizing as the spring shopping season gets into full swing.
Mortgage rates are trending lower, with the average rate on a 30-year fixed mortgage dropping to 6.28% from 6.32% the previous week, according to Freddie Mac. The banking crisis that began four weeks ago has weighed on U.S. Treasury yields, which fell for the fourth consecutive week.
The drop in interest rates was also caused by the Federal Reserve’s quarter-point hike in interest rates in March as it continues its aggressive policies to curb rapid inflation.
The yield on 10-year Treasuries, which is roughly tied to the average 30-year mortgage rate, stood at 3.41% at the end of the week, down from 4% in early March.
“While commercial mortgages may become increasingly difficult to access, residential mortgages will become more readily available,” Lawrence Yun, chief economist at the National Association of Realtors, said in a press release. It is expected that.”
(RJ Johnston/Toronto Star via Getty Images) (Toronto Star via Getty Images)
Mortgage applications fell 4.1% for the week ending March 31, according to the latest data released last week by the Mortgage Bankers Association.
Prior to this decline, the number of mortgage applications had increased for four consecutive weeks.
“Mortgage rates are no longer rising, but they are likely to remain high for some time,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a recent note to clients. “So to improve affordability, (housing) prices have to do a big job. Prices have fallen by about 5% since the summer, but they are expected to fall by another 15% next year and due to coronavirus We expect it to return to its previous price.”
Here’s a summary of key housing data developments for the first few months of 2023.
pending home sales
According to data released by the National Association of Realtors on March 29, the number of existing home purchase agreements in the United States increased in February, marking the third straight month of increases.
Contract signings increased in all regions of the country except the West. Pending sales increased 6.5% month over month in the Northeast, 0.4% in the Midwest and 0.7% in the South. OutWest’s pending home sales decreased by 2.4%.
“Affordable regions such as the Midwest and South of the United States are leading the recovery,” Yun said.
home builder emotions
U.S. homebuilder confidence rose slightly in March, marking the third consecutive month that U.S. homebuilders are increasingly optimistic about the U.S. housing market.
The National Association of Home Builders/Wells Fargo Builder Sentiment Index rose 2 points to 44, numbers released March 15 showed. Analysts had expected the index to reach 40.
story continues
“Even as builders continue to grapple with persistently high construction costs and material supply chain disruptions, buyers are waiting for interest rates to fall and turning more towards the new home market due to a shortage of existing homes. “Inventory continues to report strong pent-up demand,” Alicia Huey, president of NAHB, a custom home builder and developer in Birmingham, Alabama, said in a press release.
Number of housing starts
The number of housing starts in February rose 9.8% to an annual rate of 1.45 million units, the highest pace of construction starts since September last year, the Commerce Department announced on March 16.
The number of single-family housing starts increased by 1.1% annually to 830,000, and the number of multifamily housing starts increased by 24% to 608,000. In February, starts increased in all regions except the Northeast.
Used home sales
According to data released by the National Association of Realtors on March 21, existing home sales in February increased by 14.5% to an annual rate of 4.58 million units, the largest monthly increase since July 2020. The rally also marked the end of a 12-month decline.
Existing home sales exceeded economists’ expectations of 4.2 million units for the year, according to Bloomberg data. The median sales price for existing homes fell 0.2% from a year ago to $363,000, according to NAR data.
“We’re seeing strong sales growth in areas where home prices are falling and local economies are adding jobs,” Yun said.
About 57% of homes sold in February were on the market for less than a month.
Newly built home sales
New single-family home sales rose 1.1% in February to an annual rate of 640,000 units, up from 633,000 units in January, according to a Census Bureau report released March 23. This figure was 19% below the pace a year ago.
The median sales price for new homes in February was $438,200, and the median sales price reached $498,700.
At the end of the month, there were an estimated seasonally adjusted 436,000 new homes on the market, equivalent to about eight months’ supply at current sales rates.
Orphe Divounguy, senior economist at Zillow, said in a statement that the low inventory suggests that “while buyer demand is also increasing, builders are still likely to face difficulty completing units.” I wrote.
Case Shiller home prices
The S&P CoreLogic Case-Shiller U.S. Home Price Index fell 0.5% month-over-month in January, according to data released on March 28. On an annualized basis, the index rose 3.8% in January, down from 5.6% the previous month. month.
According to the report’s 20-City Composite Index, which tracks prices in 20 metropolitan areas, prices in January fell 0.6% from the previous month and rose only 2.5% from a year earlier. All 20 cities reported lower prices in the year ending January 2023 compared to the year ending December 2022, according to the report.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
Click here for the latest economic news and indicators to help you make investment decisions.
Read the latest financial and business news from Yahoo Finance
