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The Week in Housing: Home Prices, Pending Home Sales, and Interest Rates

by Ryan Hinricher on July 4, 2011 · 2 comments

  

Rates Steady for Full Month

For the 4th straight week, interest rates were firm.  Freddie Mac reported that the 30-year fixed interest rate averaged 4.51% compared to 4.50% last week.  The 15-year fixed rate was unchanged from the prior week.  Last year at this time the 30-year fixed averaged 4.58% and the 15-year averaged 4.04%.

Interest rates since April, 2010:

Interest rates are having little success in boosting home sales.  Low rates are helping many refinance existing debt and create more free household cash flow.  In fact, refinances are nearly 70% of the mortgage market.

Pending Home Sales Jump

The National Association of Realtors reported a rise in its Pending Home Sales Index­.  The index rose 8.2% in May over April and 13.4% higher than May, 2010.  This is a big improvement over last month, but remember last month pending home sales were down.  Still increases are celebratory in a recovering housing market.   Inventory levels are being chipped away slowly, causing housing to lag the overall economic recovery.

Pending home sales were 7.3% higher in the Northeast in May and are up 4.4% over May 2010.  Pending sales were up 10.5% in the Midwest in May and are 17.2% higher than May 2010.  The South saw an increase of 4.1% with a year-over-year increase of 14.6%.  The West saw the biggest percentage increase in May, up 12.9% and are 13.5% over last May.

Case-Shiller Shows Rise in Home Prices

Home prices rose for the first time in 8 months in both the 10-city and 20-city Case-Shiller Home Price Indices.  The 10-city composite rose 0.8%, while the 20-city composite rose 0.7% in April over March, 2011.  Year-over-year the 10-city is down 3.1% and the 20-city is down 4.0%.

Of the 20-city composite, 6 hit new lows (Charlotte, Chicago, Detroit, Las Vegas, Miami, and Tampa).  The stand out city, of course, was Washington, D.C., posting a year-over-year gain of 4.0%.  On the other end of the spectrum, Minneapolis dropped 11.1% in the last year.   The Case-Shiller index is finally bottoming out (for the second time).

CoreLogic Price Index Up

More validation that home prices are looking up came from CoreLogic this week.  The firm released its May Home Price Index, showing home prices improved in the US for the month.  Including distressed sales, home prices increased by 0.8% in May over April.  On the ye

The leading index of economic indicators declined 0.3% in April.  Housing data was weaker in April as well.  Because of this, rates have continued the short term downward trend.  When economic indicators improve, we’ll see rates rise commensurately.

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{ 2 comments… read them below or add one }

Jeff Morris (Real Estate Agent) July 4, 2011 at 3:20 pm

Great post Ryan, beautifully explained the information of estate rising!

Reply

Felize Summons July 4, 2011 at 8:26 pm

Insightful post, Ryan, many thanks! Really helpful among real estate professionals and home buyers alike.

Reply

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