Home Prices Jump, Time on Market Falls
The median home price jumped 13.5% from this time last year to $214,200. This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.
The National Association of Realtors released their Existing Home Sales report for June this morning and it also showed that sales of previously owned homes increased 15.2% from June 2012. On a month-over-month basis, sales slipped 1.2%.
Time on market decreases: The median time on market for all homes was 37 days in June, down from 41 days in May, and is 47 percent faster than the 70 days on market in June 2012. Forty-seven percent of all homes sold in June were on the market for less than a month.
First-time buyers accounted for 29 percent of purchases in June, compared with 28 percent in May and 32 percent in June 2012.
With homes on the market for fewer days and home prices increasing, now is the time to buy your next home before interest rates and home prices increase further.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +131 basis points from last Friday’s close which caused 30 year fixed rates to move lower. This marks the second straight week of over +100 BPS gains in the benchmark mortgage backed security and therefor, lower mortgage rates.
We started the week off with a rally as MBS climbed off of their lows after Retail Sales came in much lower than market expectations. Bonds generally rally (better rates for you) on weaker economic data.
But it was another week that focused on Fed Chairman Ben Bernanke. Bernanke testified before the House and Senate last week as part of his semi-annual monetary policy report. As we have been discussing for some time, traders are very focused on the timing of when the Federal Reserve will begin to reduce the amount of monthly Treasury and MBS bond purchases. MBS rallied as traders speculated that Bernanke’s most recent comments pointed to the Fed waiting longer to “taper” their monthly purchases. The prior speculation was that this tapering would begin in September.
The change in trader sentiment is due to Bernanke’s comments that tapering will occur once the economic data (with particular focus on the labor market) shows enough of an improvement and traders currently do not perceive that there is enough economic improvement yet and so, their projections on the timing of the tapering is shifting for later down the road. Of course, this sentiment among traders could change next week.
|Date||ET||Economic Release||Actual||Market Expects||Prior|
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|22-Jul||10:00 AM||Existing Home Sales||–||5.28M||5.18M|
|23-Jul||9:00 AM||FHFA Housing Price Index||–||NA||0.70%|
|24-Jul||7:00 AM||MBA Mortgage Index||–||NA||NA|
|24-Jul||10:00 AM||New Home Sales||–||481K||476K|
|24-Jul||10:30 AM||Crude Inventories||–||NA||-6.902M|
|25-Jul||8:30 AM||Initial Claims||–||328K||334K|
|25-Jul||8:30 AM||Continuing Claims||–||2990K||3114K|
|25-Jul||8:30 AM||Durable Orders||–||1.50%||3.70%|
|25-Jul||8:30 AM||Durable Goods -ex transportation||–||0.40%||0.50%|
|25-Jul||10:30 AM||Natural Gas Inventories||–||NA||58 bcf|
|26-Jul||9:55 AM||Michigan Sentiment – Final||–||84.2||83.9|
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.