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National Overnight Average Rates

Last week 7/13 7/14 7/15 7/16 7/17
30 year fixed 4.12% 4.19% 4.22% 4.21% 4.20% 4.17%
15 year fixed 3.16% 3.20% 3.20% 3.17% 3.16% 3.16%
5/1 ARM 3.12% 3.32% 3.11% 3.24% 3.10% 3.09%

* Data source:

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Fannie, Freddie cut housing-market forecasts for 2014


On the heels of a choppy first quarter, federally controlled mortgage-finance giants Fannie Mae and Freddie Mac have cut their forecasts for the U.S. housing market’s performance in 2014.

Doug Duncan, Fannie’s chief economist, said Monday that he now expects builders to start construction on 1.05 million housing units this year, down 50,000 from Fannie’s forecast earlier this year. He cited constraints on credit and labor.

Last week, Freddie cut its forecast for home sales in 2014 to 5.5 million from a prior estimate of 5.6 million.

“Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” said Frank Nothaft, Freddie’s  chief economist.

Looking forward, projects and purchases delayed by bad weather could pop up in coming housing reports. While dropping affordability will continue to trim some sales, mortgage rates do remain relatively low, home-price growth is expected to slow down and some banks are easing standards for loans.

US sales of new homes up in January

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U.S. sales of new homes rebounded in January to the fastest pace in more than 5 years, offering hopes that housing could be regaining momentum after a slowdown last year caused by rising interest rates.

Sales of new homes increased 9.6% in January to a seasonally adjusted annual rate of 468,000. That was the fastest pace since July 2008.

Sales had fallen 3.8% in December and 1.8%t in November, leading to worries that the housing recovery could be losing momentum.

The median price of a new home sold in January was up 3.4% from a year ago to $260,100.

The sales gain was led by a 73.7% surge in sales in the Northeast. Sales were up 11% in the West and 10.4% in the South. The only region to see a sales decline was the Midwest where sales fell 17.2%.

Sales for all of 2013 rose to 428,000, the highest point in five years and an increase of 16.3% from 2012.

Economists expect sales to grow more in 2014 although they do not expect the gain to be as robust as the 2013 increase.

Price increases are expected to moderate in 2014 as well. The Standard & Poor’s/Case-Shiller 20-city home price index rose by a healthy 13.4% in last year. That was the largest calendar gain in eight years.

The National Association of Realtors reported last week that sales of existing homes plummeted in January to an annual rate of 4.62 million units. That was down 5.1% from the December pace.

The average rate on a 30-year mortgage rose to 4.33% last week, up from 4.28& the previous week. Rates surged about 1.25% points from May through September, peaking at 4.6%.

The economy is also expected to show greater strength with many analysts expecting overall growth to climb to close to 3% this year, up from just 1.9 percent in 2013.

Homebuilders Remained Confident in January on Rising U.S. Sales


Confidence among U.S. home builders held in January near its highest level in eight years, indicating the residential real-estate market will continue to contribute to economic growth in 2014.

The National Association of Home Builders/Wells Fargo builder sentiment gauge fell to 56 from 57 in December.

Builder confidence fell in two of four regions, led by a seven-point drop in the South. The index also fell in the Midwest and rose in the Northeast and West.

Borrowing Costs

Borrowing costs for homebuyers, which have been climbing since May, were largely unchanged for the week ended Jan. 9, with the average 30-year, fixed-rate mortgage at 4.51%, down from 4.53% the week before. A year ago, the average rate was 3.4%, according to Freddie Mac.

A strengthening housing market and low interest rates have boosted builders, suppliers and lenders. The outlook remains positive even with a plunge in mortgage refinancing and slowing growth in home values. And despite the rise in , and interest rates over the past year, housing is still very affordable.

A report  to show housing starts dropped to a 990,000 annualized pace in December after surging to a more than five-year high of 1.09 million the prior month, according to the median forecast of economists surveyed before figures from the Commerce Department. It would still mark the best back-to-back months since 2008.

Rising Mortgage Rates Shouldn’t Halt Home-Price Gains – Fannie Mae


Mortgage rates slipped last week but few doubt their long-term trajectory is an upward one. Fannie Mae economists Doug Duncan and Mark Palim stopped by the Barron’s offices this week to talk about rising rates and their impact on the housing market.

They looked back at the last two periods of rising mortgage rates prior to last year: in 1994-95 when rates rose by 240 basis points over a 24-month period, and in 1999-2000 when rates rose by 180 basis points over a period of 19 months. In both cases they found that home prices continued to rise but the rate of increase slowed. At the same time the number of homes sold either fell or flattened, while the use of adjustable-rate mortgages, or ARMs, spiked.

What’s different this time, Duncan notes, is that rules for underwriting mortgages, particularly ARMs, have changed, becoming more strict in the wake of a financial crisis that was largely caused by terrible mortgage underwriting standards. Palim says the market should become less volatile as a result of these tighter rules. Duncan sees the 30-year fixed-rate mortgage rate rising to 5.0% by the end of 2014, and he expects the pace of home price increases to be just half of year’s pace, while existing home sales should rise by about 1.8%.

详细历史记录请参看:Rates History

Freddie Mac: 30-year mortgage rate rises to 4.53% from 4.48%

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The economy is brightening as 2014 arrives — but that could signal higher borrowing costs for homebuyers as the Federal Reserve scales back its efforts to lower interest rates and the chance of higher inflation increases.

Lenders were offering 30-year fixed-rate mortgages this week at an average of 4.53%, up from 4.48% last week and the highest since September.

The interest rate for a 15-year fixed loan averaged 3.55%, up from 3.52% last week. The start rate for adjustable loans fixed for the first five years was 3.05% compared to 3% a week ago.

Freddie Mac, the government-supported issuer of bonds backed by mortgages, asks lenders about the terms they are offering to solid borrowers with at least 20% down payments or 20% home equity for those refinancing their loans. The borrowers would have paid less than 1% of the loan amount in lender fees and discount points to obtain the rates.

“Mortgage rates edged up to begin the year on signs of a stronger economic recovery,” Freddie Mac chief economist Frank Nothaft said in a statement. An index of pending home sales turned positive in November after declining for five months, he noted, and consumer confidence rose in December.

详细历史记录请参看:Rates History

Housing, confidence gain as economy improves


Home prices in most U.S. cities are increasing more slowly than earlier in the year, and consumer confidence is rising, in dual signs that expectations of a stronger economy in 2014 are taking root.

The Conference Board’s Consumer Confidence Index rose 6.1 points in December, to 78,1, recouping almost all of the drop it sustained during the October government shutdown, the board reported on Tuesday.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.2% from September to October. Prices have risen 13.6% over the past 12 months, the fastest since Feb. 2006.

Price increases are moderating because the wave of foreclosed properties that sold cheaply in 2010 through early 2012 has largely crested, Sterne Agee economist Lindsey Piegza said. Conditions now may lead to a stronger push in new home construction next year, Barclays economist Cooper Hawes said.

Investors are getting more confident as well. A new survey by State Street Global Exchange said its investor confidence index rose to 95.9 in December, up 4.7 points from November’s revised reading of 91.2.

Mortgage rates on the rise again


Flat screens and espresso makers? No, turns out that consumers should have been buying mortgages on Cyber Monday. By the end of the day, the average rate on the commonly used 30-year-fixed mortgage was 4.5%, its highest point since mid-September, according to Mortgage News Daily. It was 3.36% a year ago.

Home prices were up 12.5% in October, according to the latest reading from CoreLogic. While the gains are beginning to slow, the sharp move up this year has rattled the housing recovery.

Despite rising rates, several mortgage products are available, and you may be able to reduce your monthly payment a bit if you have clean credit and a solid down payment. In today’s market, of course, those are big ifs. While housing price gains had been viewed as a sign of recovery, most are now saying that a slowdown going into 2014 is a good thing.

Taking a collective breath will help some during the slow winter season, but buyers should beware that spring could bring not just higher prices but higher mortgage rates. The days of the 3 percent 30-year fixed are clearly over.

详细历史记录请参看:Rates History

Pending home sales fall again


Signed contracts to buy existing homes fell for the fifth straight month in October, as the government shutdown added to an overall slowdown in the U.S. housing market. So-called pending home sales eased 0.6% from an upwardly revised September reading and are down 1.6% from October 2012, according to the National Association of Realtors. This is the lowest sales pace since December 2012.

Regionally, gains in pending home sales in the Northeast and Midwest were stronger, while the South and West saw deeper declines. Sales rose 2.8% month-to-month in the Northeast and 1.2% in the Midwest. Sales slipped 0.8% in the South from September and in the West the decline was steepest, with 4.1% fewer buyers signing contracts.

While the Realtors’ survey,  showed a big drop in the usually investor-heavy West, another report saw investors returning to the market in October after stepping back earlier in the year. After surging to 23% of the market in February, investors made up just 16.6% of home buyers in August, according to Campbell/Inside Mortgage Finance. Over the past two months, however, that share has climbed back to 17.4%

US home prices rise at fastest pace since 2006


U.S. home prices rose in August from a year earlier at the fastest pace since February 2006. But the price gains slowed in many cities from July, a sign that the spike in prices over the past year may have peaked.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 12.8% over the 12 months ending in August. That’s up from 12.4% in July from a year earlier. All 20 cities showed year-over-year gains (The Case-Shiller 20-city index covers roughly half of U.S. homes).

However, a measure of month-over-month prices for the 20 cities rose just 1.3% in August. That’s’ down from a 1.8% month-over-month gain in July. And 16 of the 20 cities reported more modest price increases in August than in July.

Prices in Las Vegas rose 29.2% from a year earlier, the fastest pace in the nation. But they are still 47% lower than they were before the housing market collapsed.

Prices in Denver and Dallas hit record levels in August. None of the other cities have returned to where they were before the real estate collapse.

Average home prices are only back to mid-2004 levels and 22% below their April 2006 peak.

And many of the cities are seeing their gains slow.

Prices in San Francisco increased 0.9% in August, down from a 2.2% monthly increase in July.

Despite rising for 26 straight months, prices in Detroit are still lower than they were in January 2000.

Contingent Macro Advisors economists Maninder Sibia and Steven Wood said housing inventory was only 83% of normal levels. They expect the supply to increase as rising prices encourage home owners to put their houses on the market.

Mortgage Loan Rates at Four-Month Lows


The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications last Wednesday morning, noting a decrease of 0.6% in the group’s seasonally adjusted composite index. Mortgage loan rates dropped across the board last weeks.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.46% to 4.39%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.51% to 4.43%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.53% to 3.51%. All three loan types have fallen to their lowest levels since June.

The contract interest rate for a 5/1 adjustable rate mortgage loan remained unchanged at 3.25%.

详细历史记录请参看:Rates History

Housing Market Is Cooling And That’s Great News For Potential Bubbles: Zillow


U.S. housing prices rose 8.5% through August even as higher mortgage rates hurt demand. Though home prices continue to rise, real estate research from Zillow finds evidence the housing market is cooling. The pace of home value appreciation slowed in the third quarter to 1.2%, about half the pace of the second quarter of this year. And as Stan Humphries, chief economist at Zillow, tells — that’s “a pretty good thing.” Why?

“We have been wanting to see a little bit of moderation in the pace of home value gains because they’ve been rising at a very fast pace off the bottom. And in order to get back to a normal pace we need to start to see things moderate,” he tells us. “The normal pace in the housing market looks more like 3.5% [growth in values] a year, so in the past several months we’ve been rising at almost twice that pace.”

Zillow’s research also finds the larger decreases in home value appreciation came in markets that they’ve been watching as potential bubbles – including San Francisco, San Diego and Los Angeles. So is Humphries confident we’re staving off any bubbles at this point? He says yes.

Home affordability is also declining. A new report from finds it’s harder for a median-income household to afford a median-priced home in all of the country’s top 25 real estate markets this year compared to a year ago. That’s because home prices have risen close to 16% along with mortgage rates while income has not kept pace (income has risen by about 3%).

US new-home sales jump 7.9% in August


US new home sales jump 7.9% in August to 421K, biggest one-month gain since January.  That comes after sales plunged 14.1% in July to a 390,000 annual rate.

The rebound in sales could ease worries that higher mortgage rates have started to dampen sales. Home builders remain more confident in the market than they’ve been in 8 years.

New-homes sales were 12.6% higher in August than a year ago. The number of new homes available for sale rose 3.6% from July to 175,000.

The median price of a new home sold in August fell 0.7% from July to $254,600.

Sales rose in all but one region of the country in August, increasing 19.6% in the Midwest, 15.3% in the South and 8.8% in the Northeast. Sales plunged 14.6% in the West, the second straight month of double-digit declines.

Many economists say the housing recovery should withstand the recent rate increase. Mortgage rates are still quite low by historical standards.

Mortgage Loan Rates Encourage More Purchase Applications


The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting an increase of 5.5% in the group’s seasonally adjusted composite index, following a rise of 11.2% for the previous week. Mortgage loan rates once again fell slightly across the board last week.

The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.75% to 4.62%. The rate for a jumbo 30-year fixed-rate mortgage fell from 4.83% to 4.66%. The average interest rate for a 15-year fixed-rate mortgage fell from 3.81% to 3.68%.

The contract interest rate for a 5/1 adjustable rate mortgage loan dropped from 3.54% to 3.39%.

Interest rates came down slightly last week and purchase applications rose sharply. This is the second consecutive weekly gain in applications and the second consecutive drop in mortgage loan rates.

详细历史记录请参看:Rates History

U.S. existing home sales rise to 6-1/2 year high


U.S. home resales hit a 6-1/2 year high in August as buyers flocked back to the market to lock in cheap borrowing costs amid rising mortgage rates, a signal of continued strength in the housing market recovery.

The National Association of Realtors said on Thursday existing home sales increased 1.7% to an annual rate of 5.48 million units last month.

The Federal Reserve cited tighter financial conditions as one reason for its decision this week not to taper its stimulus program aimed at supporting growth, a surprise to investors and economists who had expected it to scale back bond-buying. Slower asset purchases would have pushed mortgage rates even higher.

The months’ supply remained below the 6.0 months that is normally considered as a healthy balance between supply and demand. The U.S. housing market had been impacted by tight supplies in some parts of the country.

Investors bought 17% of homes in August, with first-time buyers accounting for 28% of the transactions.

The Exchange The Buyer’s Market in Housing Is Over


You don’t usually find clearance sales on real estate. But the last two years are beginning to look like the deal of a lifetime for anybody who bought a home.

That dynamic may now be changing as home prices surge by double-digits, interest rates rise and the whole housing bust recedes into the past. The latest sign that the buyer’s market is ending is a convincing improvement in foreclosures. Sales of foreclosed homes now account for about 12% of home sales. That’s down from 17% a year ago and 37% in 2009, the low point of the housing bust.

With fewer foreclosures, there’s less of a discount on distressed homes, and firmer prices overall. In 2009, foreclosed homes sold for about 25% less than their estimated value. Today, they sell for about 8% less than their estimated value. Prices bottomed out in the first half of 2012 and are now rising by about 12% year over year.

There’s some evidence now that trade-up buyers are finally, well, trading up. Sales of lower-priced entry-level homes that might typically appeal to first-time buyers are falling, possibly because new buyers are still struggling to get credit. But sales of higher-priced homes that would typically appeal to second- or third-time buyers are rising.

This comes at the same time that 30-year mortgage rates have spiked from about 3.5% in April to more than 4.5% now. The median sales price of a home, around $214,000, is now high enough for the typical seller to turn a small profit on the sale, which comes in handy for families that are turning around and buying another house.

That’s why the end of the buyer’s market isn’t the end of the housing recovery. Rising prices ought to lure more sellers to put their homes up for sale, increasing the supply of homes and putting a check on rising prices.

Is the Housing Recovery Still On Track?


New housing data released Tuesday could give prospective home buyers the motivation to make a bid on that home or condo they’ve been eyeing. Home prices in the 20 cities tracked by the S&P/Case-Shiller Home Price Index rose 12.1% in June versus the same month in 2012. In May prices jumped 12.2%, the biggest increase since March 2006.

Prices in Denver and Dallas reached new all-time highs in June but property values for all of the 20 cities included in the index posted monthly and annual gains.

Home buyers in particular are feeling a “sense of immediacy” to purchase homes before prices and mortgage rates rise even more. Mortgage rates are still hovering near record lows but have been steadily climbing higher. Last week the average rate on a 30-year mortgage touched a two-year high of 4.58%, up from 3.35% in early May according to Freddie Mac ( Rates History ).

The housing market’s momentum will continue despite rising prices and a decline in new home sales.

The Commerce Department announced this week that new home sales in July fell 13.4% — the lowest level in nine months.

If Home Sales Can Handle Higher Rates, So Can the Fed


“Existing Home Sales Spike in July,” blares the headline from the National Association of Realtors. The organization’s enthusiasm is understandable as the latest data shows the pace of home buying in July not only came in better than expected and at the best level since November 2009, but more importantly rose in the face of sharply higher borrowing costs.

Beyond the 17% annual gain in sales, the NAR also reports that the median price for used homes rose nearly 14% to to $213,500, marking the 17th consecutive month of annualized gains, and leaves the benchmark just 7% shy of its all-time high set in July 2006.

In the wake of this evidence, and the certainty that the Fed will soon began to reel in its $1 trillion annual asset purchase program (perhaps as early as next month), a huge obstacle in the way of higher interest rates has just been moved.

To be fair, as strong as the July housing data was, even the NAR says the unexpected jump may have been partly due to people who were finally motivated to jump off the sidelines and act.

US homebuilder confidence nears 8-year high


Confidence among U.S. homebuilders is at its highest level in nearly 8 years, fueled by optimism that demand for new homes will drive sales growth into next year.

The brighter sales outlook is the latest sign pointing to a sustained pickup in construction in coming months and comes as applications for permits to build single-family houses are at a 5 year high.

The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday jumped to 59 this month from 56 in July. It was the fourth consecutive monthly gain.

Steady hiring, rising home prices and still-low mortgage rates are encouraging more people to buy homes. New-home sales jumped 8.3% in June to a seasonally adjusted annual rate of 497,000, the fastest pace in 5 years.

Applications for permits to build single-family homes rose for the third straight month in June to 624,000, the highest since May 2008. That suggests home construction should rebound in the coming months.

Many of the large, publicly traded homebuilders have been reporting sharp growth in completed sales and new-home orders this year. And sales for privately held U.S. homebuilders are up 18% over the past year, according to data provider Sageworks Inc.

On a regional basis, confidence grew in the West, Midwest and South, but was unchanged among builders in the Northeast.

Home sales take a breather, but prices hit five-year high


U.S. home resales unexpectedly fell in June after two straight months of hefty increases, but a surge in prices to a five-year high suggested the housing market recovery remained on course.

The National Association of Realtors said on Monday home sales fell 1.2% to an annual rate of 5.08 million units.

The median price for a previously owned home soared 13.5% from a year ago to $214,200, the highest since June 2008. The inventory of unsold homes on the market rose 1.9% from May, pushing the months’ supply to 5.2.

Distressed properties – which can depress prices because they typically sell at deep discounts – accounted for only 15% of sales last month.

Foreclosures and short sales, had made up 18%of sales in May.

In another sign of underlying strength, properties are selling more quickly. A home’s median time on the market in June was 37 days. That was down from 41 days in May and 70 days a year ago. Before the market collapsed in 2006, it usually took about 90 days to sell a home.

First-time buyers accounted for 29% of the transactions, far below the 40% to 45% economists and real estate professionals view as ideal.

Investors, who have been the main drivers of sales, bought 17% of the homes in June. That was down a touch from 18% in May and 19% a year ago.

Cash sales accounted for 31% of transactions in June, down from 33% in May.

Mortgage rates now a buyer stumbling block


Mortgage rates used to be the least of home buyers’ worries. But a recent interest-rate spike is turning the factor of rising home-loan rates into a widespread concern.

Rates on 30-year fixed-rate mortgages averaged 4.37% for the week ending July 18, according to Freddie Mac’s weekly survey of conforming mortgage rates. That’s down slightly from the average a week earlier, but up more than a percentage point from early May.

Of the respondents who plan to buy a home someday, 13% said a mortgage rate of 4% would be too high and 20% said a mortgage rate of 5% was their limit. Another 22% said rates would have to reach 6% to discourage them from buying a home

Many in the mortgage industry think the Federal Reserve may still be buying bonds, helping mortgage rates to stay low, for the next three years or so.

While fixed-rate loans have experienced large swings, adjustable-rate mortgages haven’t been quite as volatile. People planning to live in a home for no more than five to seven years might view an ARM as a good choice, since they will likely move before the rate resets.

Don’t panic if you’re home shopping right now. Rates might not be at the bottom, but they’re still very low.

Better yet, by getting preapproved before you’ve even started home shopping, you can get a sense for how the lender treats you and decide whether you want to stick with them until closing.

Surge in mortgage rates may nudge homebuyers


Mortgage rates have suddenly jumped from near-record lows and are adding thousands of dollars to the cost of buying a home.

In the short run, the spike in mortgage rates might be causing more people to consider buying a home soon. Rates are still low by historical standards, and would-be buyers would want to lock them in before they rise further.

But eventually, more expensive home loans could price some people out and slow the housing market’s momentum.

Mortgage rates are rising because they tend to track the yield on the 10-year Treasury note, a benchmark for most long-term interest rates.

A buyer who locked in a 3.35% 30-year rate in early May on a $200,000 mortgage would pay $881/month, according to The same mortgage at a 4.46% rate would run $1,008/month. The difference: $127 more a month, or $45,720 over the lifetime of the loan.

The rate hike comes at a critical time. Low mortgage rates have helped fuel a housing recovery that has kept the economy growing modestly despite higher taxes and steep federal spending cuts.

Mortgage rates soar to 4.46%

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Rising interest rates have hit mortgages big time.

Rates on 30-year, fixed-rate home loans spiked 0.53 percentage points to an average of 4.46% this week — the largest weekly increase in more than 26 years, according to mortgage giant Freddie Mac.

The 30-year loan, which stood at 3.35% as recently as early May, is at its highest level since July 2011.

Rates for 15-year loans, popular with homeowners refinancing their mortgages, jumped 0.46 percentage points to 3.5%.

An extra percentage point(0.53) will cost homebuyers with 30-year, fixed-rate mortgages $56 more a month for every $100,000 they borrow.

The sudden jump in rates is driven by uncertainty over whether the Federal Reserve’s economic stimulus program, called quantitative easing(QE), will continue, according to Keith Gumbinger of, a mortgage information provider.

The recent rate rise might not be enough to discourage most buyers.

详细历史记录请参看:Rates History

Pending Home Sales Soar 6.7 Percent to 6-Year High


Signed contracts to buy previously owned homes rose to the highest level in six years. Rising interest rates may be causing some buyers who were on the fence to get in quickly before they are priced out.

The Pending Home Sales Index from the National Association of Realtors rose 6.7% in May from April, and is now up 12.1% from a year ago. A shortage of homes for sale has weighed on the market this year, even as demand increases. Contracts to buy newly built homes rose to a five-year high in May, according to the U.S. Census.

The average rate on the 30-year fixed conforming mortgage is up about 100 basis points from the beginning of May to around 4.5%. The rate spike the most in the past week, before these May contracts were signed.

Pending sales were highest in the West, where prices jumped the highest. . The index in the West rose 16% monthly but is just 1.1% higher than it was a year ago, due to limited inventory.

The index was unchanged in the Northeast in May month-to-month, but was 14.3% higher from a year ago. In the Midwest, sales jumped 10.2% monthly and were 22.2% higher than in May 2012. The South saw a 2.8% monthly gain, and is 12.3% above a year ago.

US new home sales hit fastest pace in 5 years


New home sales rose 2.1% last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008, the Commerce Department reported Tuesday.

The median price of a new home sold in May was $263,900, up 3.3% from a year ago.

The sales gains in May were led by a 40.7% increase in the Midwest followed by a 20.7% gain in the Northeast. Sales were also up 3.6 % in the West but they fell 9%  in the South.

The National Association of Realtors reported last week that sales of previously occupied homes surpassed 5 million in May. It was the first time that’s happened in 3½ years. The last time sales had exceeded 5 million was in November 2009, a month when the pending expiration of a home-buying tax credit briefly inflated sales.

The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 52, up from 44 in May. That was the highest reading in more than seven years and the largest monthly increase in more than a decade.

Home prices jump 12%, new home sales also rise


The housing recovery continues to pick up steam, as home prices jumped in April, and new home sales hit a five year high in May.

But a recent increase in mortgage rates could soon put the brakes on housing.

The S&P/Case-Shiller home price index was up 12.1% in April, compared to a year ago, in the 20 top real estate markets across the nation. That was the biggest annual jump in prices in seven years. Prices climbed 2.5% from March, posting the biggest one-month rise in the 12-year history of the index.

According to a separate government report: new homes sold in May is the best reading since July 2008. The pace of sales was up 2.1% from April, and up 29% from a year ago.

The median price of a new home sold in May was $263,900, down 3.1% from April. Even with the monthly decline, new home prices were up 10.3% from a year earlier.

A drop in foreclosures, coupled with a tight supply of homes for sale and mortgage rates that hit record lows, have fueled the rebound in housing over the last 11 months.

Are Homebuilders Holding Off Construction to Game Rising Prices?


New home construction rose less than expected in May. The Commerce Department said last week housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000 units versus expectations of 950,000.

Reuters reports this miss likely reflects labor and material constraints. CNBC Real Estate reporter Diana Olick adds to the list a lack of land and a supply chain for homebuilders that wasn’t ready for this pick-up in demand. But Olick also suggests the holdup in construction may be intentional.

“Believe it or not we’re hearing from some builders – self-admittedly – that they are slowing production of new homes because they want to take advantage of these rising home prices,” Olick tells The Daily Ticker in the accompanying interview. “In the last new home sales report we actually saw a huge spike in new home sale prices, and they like that. Of course they want to sell the homes for more money so they’re actually keeping the supplies lean in some cases.”

And bigger picture there is the question of if the recovery is real and sustainable. All of the data showing a recovery in housing is arguably built on a foundation including massive Federal Reserve support in the form of monetary stimulus.

For April, existing home sales improved modestly but fell short of expectations of 4.98 million units, increasing 0.6% to 4.97 million units. NAR said sales remained below underlying demand because of limited inventory and tight credit.

Mortgage Rates Aren’t Going Back Down: Fannie Mae Economist


Freddie Mac reports rates for home financing are just shy of 4% this week, the highest since the week of April 12, 2012.

What’s different this time around, according to Doug Duncan, chief economist at Fannie Mae, is that mortgage rates aren’t going back down.

Duncan says he does think the Fed will work hard to try to prevent rates from going further up from here and may try to hold them here through the end of the year.

Fannie Mae just released its mid-year economic outlook and sees a strengthening housing market pushing the economy forward at a lethargic 2.1% rate in 2013.

One interesting change Duncan says they’ve found through a survey Fannie Mae conducts is a jump in home sellers’ confidence. Forty percent now say it’s a good time to sell a home – a huge jump over last month and last year. This matters, according to Duncan, because five of eight people who are going to buy a house have to sell one first.

Tight housing supply has helped to fuel recent price gains in housing. One concern is that if people do start selling their homes, supply will increase and home price gains could slow down.

Duncan says this dynamic “will eventually slow the pace of price increase, but not until next year.”

Mortgage rates near 4% barrier


Mortgage rates moved to within a hair of the 4% barrier this week, according to mortgage giant Freddie Mac.

The average rate for 30-year, fixed rate loans rose 0.07% point to 3.98%, and is up 0.63% point since the week of May 2. Rates have not been this high since the week of April 12, 2012.

The recent improvement in the employment picture should result in more home buying, which would pressure rates even higher. Rates have also been going up because the Federal Reserve has signaled that it might cut back on buying mortgage-backed securities.

The increase will boost monthly mortgage payments for homebuyers by about $33 for every $100,000 borrowed.

But the soaring rates create a double whammy for would-be home buyers, with home prices also on a rapid rise — up more than 10% in the 12 months ended March 31, according to the S&P/Case-Shiller national home price index.

If both trends continue, it could put a damper on a housing market still in a struggle to put the bust behind it.

Pending home sales hit three-year high


Contracts to buy previously owned U.S. homes rose to their highest level in three years in April, but a shortage of properties for sale could slow down the momentum.

The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed last month, rose 0.3% to 106.0, the highest reading since April 2010.

Contracts, which become sales after a month or two, had increased 1.5% in March.

Although mortgage rates spiked last week to their highest level in a year amid heightened speculation the Fed will soon start to scale back monetary stimulus, economists do not believe higher borrowing costs would derail the housing recovery.

About a third of home resales are cash transactions.

Contracts were up 10.3% compared to April last year.

Last month, home resale contracts rose in the Northeast and Midwest. Contracts fell in the South and West.

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