Housing market data in recent weeks has offered some signs of stabilization as the spring selling season begins to ramp up.
Mortgage rates are on the downside, with the average 30-year fixed mortgage falling to 6.28% from 6.32% the week before, according to Freddie Mac. This marked the fourth consecutive weekly drop since the banking crisis that started four weeks ago has put pressure on Treasury rates.
The rate slide also comes as the Federal Reserve raised interest rates by a quarter point in March as it continues its aggressive campaign to cool rapid inflation.
The yield on the 10-year Treasury note, which closely tracks the average 30-year mortgage rate, stood at 3.41% at the end of the week, down from 4% in early March.
“While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to become more widely available,” National Association of Realtors Chief Economist Lawrence Yun said in a news release.
Mortgage applications fell 4.1% during the week ending March 31, according to the latest data from the Mortgage Bankers Association from last week.
Prior to this drop, mortgage applications had increased for four weeks in a row.
“Mortgage rates are no longer rising, but they will likely remain elevated for some time,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a recent note to clients. “That leaves [home] prices to do the heavy lifting if affordability is to be improved; Prices have fallen about 5% since the summer, but we expect a further 15% drop over the next year, restoring the pre-Covid price-to-income ratio.”
Here is a summary of where the main housing data is for the first months of 2023.
Pending home sales
Contracts signed to buy existing US homes rose in February, the third consecutive monthly increase, according to data released March 29 by the National Association of Realtors.
Contract signings increased in all regions of the country except the West. Pending sales were up 6.5% from last month in the Northeast, up 0.4% in the Midwest, and up 0.7% in the South; Pending home sales in the West fell 2.4%.
“The affordable regions of the US, the Midwest and South, are leading the recovery,” Yun said.
Home Builder Sentiment
Confidence among US homebuilders rose slightly in March, for the third month in a row as builders have increased their optimism about the US housing market.
The National Association of Home Builders/Wells Fargo Builder Confidence Index rose 2 points to 44, figures released March 15 showed. Analysts had expected this index to reach a reading of 40.
“Even as builders continue to grapple with stubbornly high construction costs and material supply chain disruptions, they continue to report strong pent-up demand as buyers wait for interest rates to fall and turn more to the new home market due to the shortage of existing housing. inventory,” NAHB President Alicia Huey, a Birmingham, Ala.-based custom home builder and developer, wrote in the news release.
housing started
Home starts rose 9.8% in February to an annualized rate of 1.45 million homes, the strongest pace of starts since last September, the Commerce Department said March 16.
Housing starts for single-family homes advanced 1.1% to an annualized rate of 830,000, while starts for multi-family homes increased 24% to a rate of 608,000. Starts were up in all regions except the Northeast in February.
Existing Home Sales
Existing home sales for February rose 14.5% to an annualized rate of 4.58 million, the largest monthly percentage increase since July 2020, data from the National Association of Realtors showed on March 21. This rise also marked the end of a 12-month decline.
The annualized rate of existing homes sold topped the 4.2 million expected by economists, according to Bloomberg data. The median sales price of an existing home slid 0.2% to $363,000, compared with a year ago, NAR data showed.
“We are seeing stronger sales gains in areas where home prices are falling and local economies are adding jobs,” Yun said.
About 57% of the homes sold in February were on the market for less than a month.
new home sales
Sales of new single-family homes increased 1.1% in February to an annualized rate of 640,000, up from the January rate of 633,000 according to a Census Bureau report released March 23. This figure was 19% lower than the rate observed a year ago.
The median sales price for a new home in February was $438,200, while the median sales price reached $498,700.
At the end of the month, there was a seasonally adjusted estimate of 436,000 new homes for sale on the market, which represented about 8 months of supply at current sales rates.
Zillow senior economist Orphe Divounguy wrote in a statement that low inventory suggests “builders will likely still face challenges completing units, while buyer demand has also increased.”
Case-Shiller Home Prices
The S&P CoreLogic Case-Shiller US National Home Price Index fell 0.5% in January compared with the previous month, according to data released March 28. In annual terms, the index rose 3.8% in January, compared with 5.6% the previous month. month.
The report’s 20-city composite index, which tracks prices in the 20 largest metropolitan areas, showed prices fell 0.6% from the previous month in January and rose just 2.5% year-over-year. past. All 20 cities reported lower prices in the year ending January 2023 compared to the year ending December 2022, according to the report.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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