Market Forecast: FHFA House Price Index, New Home Sales, and Existing Home Sales
Mortgage rates dropped last week to a post-election low. This week will be a heavy housing week with reports on the Federal Housing Finance Association’s (FHFA) house price index, existing home sales, and new home sales.
The FHFA house price index surveys the change in the value of homes financed through conventional mortgages securitized through Freddie Mac and Fannie Mae. In May, the index appreciated 0.4% month-over-month and 6.9% year-over-year.
New home sales count the sales of newly constructed homes. New home sales are a major economic indicator, not just in housing but in construction job creation and the purchase of construction materials. In June, new home sales improved to a level of 610,000.
Existing home sales or resales count the sales of previously constructed homes, condominiums, and co-ops. Existing home sales make up the majority of real estate transactions. In June, existing home sales declined 1.8% month-over-month, but improved 0.7% year-over-year, to a level of 5.520 million.
Over the summer, home prices have continued to appreciate and time on the market has sped up. The industry is facing limited inventory and builders are doing their best to replenish the supply to satisfy the demand. Even with rising home values, mortgage rates remain historically low.
Sources: Bloomberg, MarketWatch, Mortgage News Daily