Posted On July 27, 2020
Mortgage rates did not move significantly last week and continue to hit historic lows. This week, the Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday. In housing news, the S&P CoreLogic Case-Shiller home price index and the pending home sales index are both scheduled for release.
The Case-Shiller home price index tracks month to month changes in the value of homes that have been involved in two or more sales transactions across twenty major metropolitan areas throughout the country. The twenty-city index appreciated in April up 0.3% month-over-month and 4.0% year-over-year. Phoenix, Seattle, and Minneapolis led price appreciation, though no metros posted double-digit annual gains. Despite the coronavirus pandemic, buyer demand is still strong, and inventory is still low, so home price appreciation is sustained.
The pending home sales index tracks month-to-month changes in the number of homes that are under contract but not yet sold. Typically, it takes four to six weeks for a contract to close. In May, pending home sales jumped 44.3% month-over-month. Annually, however, sales still declined 5.1% from May of 2019.
The FOMC will meet on Tuesday and Wednesday of this week, and no major interest rate movement is expected. Following its June meeting, most Federal Reserve officials agreed they need to provide clearer forward guidance. A statement from the minutes read, “most [Fed officials] commented that the FOMC should communicate a more explicit form of forward guidance for the path of the federal funds rate and provide more clarity regarding purchases of Treasury securities and agency MBS as more information about the trajectory of the economy becomes available.”
Some state economies are recovering slowly while other state economies are facing additional potential lockdowns due to the coronavirus pandemic. Buyer demand has remained strong and as real estate agents and loan officers adjust to social distancing guidelines and digital services, buyers are still making purchases. If you have any questions about how we are continuing to safely operate, please let us know.