Existing Homes Sales Show Tight Market

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Published Date 8/28/2017

Realtor Report

Existing Homes Sales Show Tight Market

The National Association of Realtors released their recent Existing Home Sales report for July, and it showed a very tight housing market. Existing Home Sales are the single best measure of the health of the real estate market as they are completed transactions of single family homes, townhomes, condominiums, and co-ops.

Here are some highlights:

On average, homes listed for sale went under contract in under 30 days for the fourth straight month. Fifty-one percent of homes sold in July were on the market for less than a month.
The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.
Inventory is still a major issue (not enough of it) with only 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
First-time buyers were 33 percent of sales in July, which is up from 32 percent both in June and a year ago.
All-cash sales were 19 percent of transactions in July, up from 18 percent in June but down from 21 percent a year ago.
Existing Home Sales came in at a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.

Overall, the above data is excellent showing steady appreciation and demand; it appears that only the lack of available inventory is keeping Existing Home Sales from grown at an even faster pace.

Source: NAR.Realtor

This Week's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways this morning. Last week the MBS market improved by +7 ps. This wasn't enough to improve mortgage rates or fees. Mortgage rate volatility remained low.

This Week's Rate Forecast: Neutral

Here are some highlights:

On average, homes listed for sale went under contract in under 30 days for the fourth straight month. Fifty-one percent of homes sold in July were on the market for less than a month.
The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.
Inventory is still a major issue (not enough of it) with only 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
First-time buyers were 33 percent of sales in July, which is up from 32 percent both in June and a year ago.
All-cash sales were 19 percent of transactions in July, up from 18 percent in June but down from 21 percent a year ago.
Existing Home Sales came in at a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.

Overall, the above data is excellent showing steady appreciation and demand; it appears that only the lack of available inventory is keeping Existing Home Sales from grown at an even faster pace.

This Week's Potential Volatility: Average

Mortgage rates are likely to continue to trade in a very tight range. We could see some mortgage rate volatility due to the Average Hourly Wages report on Friday.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.