This week, as we head into the unofficial start of summer with the Memorial Day Holiday, I want to pause and honor all those and their families that have served our country with their military service. Thank you and we honor you! I hope you all have a fabulous long weekend and that wherever you are the sun is shining.
I’ll tell ya where else the sun is shining and it’s shining hot on the housing market. Builder sentiment remains high even as housing starts fell 9.5 percent to an annual rate of 1.569 million below the consensus of 1.705 million. Permits for new housing projects rose 0.3 percent to an annual rate of 1.760 million in April, below expectations of 1.780 million.
Existing home sales slipped 2.7 percent in the month of April to a 5.850 million annual rate, below expectations, but still robust. Tight inventory remains the culprit, holding back home sales, even though sales are up 11 percent over 2019 levels.
Wonder why it seems so tough to buy right now? Here’s some interesting data:
— Cash buyers account for 25 percent of purchases
— Home sales in the $500k – $700k range are way up
— Home sales in the $750k – $1million range are up 146 percent!
— Home sales in the $1million and up category are up 212 percent!
We also got some home price appreciation data with the Case-Shiller Home Price index, which has posted gains of at least 1 percent for seven straight reports. It reported a monthly 1.6 percent increase in March. The annual rate beat expectations handily rising 13.3 percent versus 11.9 percent in February.
New home sales crushed expectations in March at a 1.021 million annual rate yet for April, despite lower mortgage rates, forecasters saw sizable give back with the month’s rate at 863k. Again, inventory of new homes is playing a part here as new home building has been hampered by elevated lumber prices.
On Friday we get a look at the Fed’s favorite inflation indicator. If it shows outsized inflation figures, like the CPI and PPI have done, we could see mortgage rates bump even higher. Prices turned sharply higher in March whether on the month and especially on the year; April’s expectations for the core are a very swollen monthly increase of 0.7 percent for an annual rate of 3.0 percent that would compare with March’s 1.8 percent.
Of course, I’ll be keeping an eye on all of it for you! Reach out if I can help you with your upcoming purchase or refinance.