Home prices rose to their 30-month high in December and at their fastest pace in over 2.5 years, according to the latest Case-Shiller results. The Indices’ chairman explains why rates are rising so rapidly and if the speed of increase is a reason for alarm.
Category: Industry News
In the February 2017 Economic and Housing Outlook from Fannie Mae released on Thursday, there are moderate growth expectations for the market in 2017, as experts continue to debate on developing policies and regulations from the Trump administration.
According to the report, the full-year economic growth forecast remains unchanged from last month’s projection of 2.0 percent, which is slightly above the 1.9 percent growth registered for all of 2016,”
Doug Duncan, Chief Economist at Fannie Mae, noted that timing will play an integral role in the positioning of policies and regulations from the Trump administration.
“Last month we revealed our theme for the year, ‘Will Policy Changes Extend the Expansion?‘ That question still hovers as the month-old Administration begins enacting its agenda,” he said. “Timing effects make it unlikely that we’ll see materially positive impacts stemming from any fiscal stimulus or deregulation this year, while immigration and trade policy pose downside risk.”
Although job growth was one of the highlights last month, wage growth hindered people from re-entering the workforce. The unemployment percentage rate decreased to 4.7 last month from 5.0 in 2016.
There was also an uptick in home sales, with new single-family home sales saw an increase of 552 from last year and total existing home sales increasing from 5,300 to 5,437.
“Mortgage rates have moderated slightly but remain 60 basis points higher than before the election. Still, leading indicators of home sales are encouraging with pending home sales rebounding and purchase mortgage applications holding up,” the report stated.
Duncan remarked that although a multitude of factors are preventing the economy from moving forward, expansion is on the horizon, and it is coming at a faster rate.
“We expect the housing expansion to continue, albeit at a more moderate pace than last year given continued pressure on affordability. Depressed inventory, particularly in the more affordable segments, will likely constrain sales and push home price gains that outpace income growth. A faster pace of monetary tightening, unless accompanied by a stronger increase in household income, also poses downside risk to housing,” said Duncan.
To read the full report, click here.
Here Come 59 Million Buyers! | Here Come 59 Million Buyers! Daily Real Estate News | Friday, February 10, 2017 One in four U.S. adults say they are considering buying a home this year, which extrapolates to a whopping 59 million people, according to a recent survey by Bankrate.com. Minorities are expected to be big buyers this year. More than two in five black survey respondents said they were considering buying a home. That is more than double the percentage of potential white buyers.
Home prices increased in November, bringing a chairman of the Index Committee to explain that the housing market is completely recovered from the crisis. Case-Shiller’s top 20 cities all posted monthly increases after seasonal adjustment. One expert explains why the new administration could push home prices even further in the months to come.
The U.S. Department of Housing and Urban Development on Friday suspended a controversial plan that would have slashed the premium rates for certain federally backed mortgages.
The reversal by the Federal Housing Administration came less than two hours after Donald Trump was sworn in as president.
The announcement came in a letter signed by Deputy Assistant Secretary for Housing Genger Charles, which said the reduction in FHA mortgage insurance premiums that was slated to take effect on Jan. 27 would be “suspended indefinitely.”
As the country’s homes for sale inventory declines, prices and the percentage of homes going under contract quickly are rising, according to Redfin.
The housing inventory dropped 12.7% in December from a year earlier to the lowest level reported in three years, Redfin reported Thursday. Among homes sold last month, 32.7% were under contract within two weeks, which Redfin characterized as “the largest reduction in inventory in any single month…on record.”
When the FHA announced late last year that its flagship fund, the Mutual Mortgage Insurance Fund, grew for the fourth straight year, it led to many question whether we would see a cut to its mortgage insurance premiums again. Now we have an answer. Click the headline for the full details on the FHA reducing mortgage insurance premiums.
Fixed mortgage rates, which have been on a tear since the presidential election, retreated this week, falling for the first time in nine weeks.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average tumbled to 4.2 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.32 percent a week ago and 3.97 percent a year ago.