MORTGAGE BLOGPosted On August 27, 2018
Mortgage rates have not moved significantly for the past two weeks, even trending downward according to some sources. This week, the S&P CoreLogic Case-Shiller home price index will come out on Tuesday and the Mortgage Bankers Association (MBA) weekly mortgage application survey and the National Association of Realtors (NAR) pending home sales index will come out on Wednesday.
The Case-Shiller home price index tracks changes in the value of homes involved in two or more sales transactions across twenty major metropolitan areas throughout the country. The Case-Shiller home price index has trended rapidly upward, as lack of available homes for sale moves home prices up. In May, the 20-city index appreciated 0.2% month-over-month and 6.5% year-over-year. Although prices continue to trend upward, appreciation has decelerated as housing activity slows. Las Vegas, San Francisco, and Seattle led the appreciation trend with double-digit annual gains.
The MBA weekly mortgage application survey shows week-to-week changes in the submission of new purchase and refinance mortgage applications. For the week ending 8/17, new purchase applications increased 3.0% and refinance applications increased 6.0% for a composite increase of 4.2%. After climbing earlier this summer, mortgage rates have plateaued, reactivating some new purchase and refinance activity.
The pending home sales index tracks homes that are under contract but not yet closed. In June, pending home sales improved marginally, up 0.9% month-over-month, but declined 2.5% year-over-year. According to NAR chief economist, Lawrence Yun, the housing market is stalling as “the positive forces of faster economic growth and steady hiring are met by the negative forces of higher home prices and mortgage rates.” June’s positive report may be a sign of a turnaround ahead, as home builders replenish for-sale inventory.
Overall construction has slowed, but in some specific markets, construction activity has stayed strong. Home builders especially have concentrated on building larger, luxury homes, because of the higher profit margin. Home buyers interested in moving up to a larger home, with a high-balance home, can finance their purchase through nonconforming jumbo loans. Jumbo loans are available for primary residence, investment properties, and second homes. To find out if a jumbo loan is right for your home purchase, consult a mortgage loan officer.
Sources: CNBC, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily
