Existing Home Sales, Cash Home Sales, Mortgage Rates edged higher in latest week
October 20, 2016
After two straight monthly declines, Existing Home Sales in September jumped 3.2 percent from August to an annual rate of 5.47 million units, above the 5.30 million expected, led by sales from first-time homebuyers. All major regions saw an increase in closings last month, reported the National Association of REALTORS® (NAR). Sales are up 0.6 percent from a year ago, though low inventories continue to be a problem in most markets. The median existing-home price for all housing types in September was $234,200, up 5.6 percent from September 2015 ($221,700). September’s price increase marks the 55th consecutive month of year-over-year gains.
Analytics firm CoreLogic reported on Wednesday that cash sales made up 29.7% of total home sales in July, up slightly from June’s 29.3%, though lower by 1.9% from July 2015. Cash sales peaked at 46.6% of total home sales in January 2011. Before the financial crisis began in mid-2008, cash sales averaged 25%. If the current pace keeps up, it could fall to pre-crisis levels by mid-2018.
Mortgage rates edged higher in the latest week rising to the highest level in four months, reports Freddie Mac. The 30-year fixed conventional mortgage rate rose to 3.52% with 0.5 in points and fees, up from 3.47% in the previous week. The all-time low was 3.31% back in November of 2012. Low rates have fueled the steady recovery of the housing sector in the past eight years, which has been due in a big way by the efforts from the U.S. Federal Reserve. The central bank began purchasing Mortgage Backed Securities, the underlying metric for mortgage rates, back in early 2009 at the height of the great recession.