Last week brought several economic and housing sector reports including Existing Home Sales, Case-Shiller and FHFA home prices for April, as well as New Home Sales. Freddie Mac’s weekly mortgage rates survey and the weekly report on new jobless claims were released on Thursday, and Consumer Sentiment for June rounded out the week on Friday.
Existing Home Sales Stronger than Expected!
Good news came from the National Association of REALTORS® Existing Home Sales report for May, which reported 4.89 million previously owned homes sold on a seasonally-adjusted annual basis. Analysts had projected a seasonally-adjusted annual figure of 4.75 million existing homes sold based on April’s reading of 4.65 million existing homes sold; April’s reading was later adjusted to 4.66 million. May’s reading represented a monthly increase of 4.90 percent over April’s reading and was the second consecutive monthly increase in previously owned home sales.
The median sales price for existing homes sold in May was $213,400, which represented a 5.10 percent increase year-over-year.
May’s reading for existing home sales was the highest in seven months, and mortgage rates trended down during May, but strict lending standards were cited as a significant obstacle to first-time homebuyers.
Federal Reserve Chair Janet Yellen recently said in a press conference that mortgage lenders “need more clarity” as to their potential liability for failed mortgages. Mortgage lenders and loan servicing companies can be required to repurchase defaulted loans or to reimburse Fannie Mae and Freddie Mac for losses associated with mortgage defaults and foreclosures.
Case-Shiller, FHFA Report Slower Pace for Home Price Growth
The S&P Case-Shiller Home Price Index and FHFA’s House Price Index for April documented slowing rates of home price growth. Case-Shiller reported a 10.80 percent year-over-year growth in home prices for April, and FHFA reported a year-over-year gain of 5.90 percent rate of appreciation for home sales associated with mortgages owned by Fannie Mae and Freddie Mac.
Analysts noted that home price growth is leveling out after last year’s steep appreciation in home prices. While homeowners may disagree, economists say that a slower rate of home price growth can actually bode well for housing markets. More buyers can afford a home, which adds stability to housing market