As weeks go, one could probably call this a banner one. Three home price indices showed home prices continuing to accelerate and two of three reports on home sales were positive (even the third wasn’t that bad). Heck, even inventories increased a bit.
New home sales appear to have finally broken free of their persistent see-saw pattern and have now risen convincingly for three straight months. Sales in March increased by 5.8% from February and were up 15.6% compared to the previous March. The bump brought the annual rate of sales to 621,000 units, nearly tying the 622,000 unit pace set in July as the highest since the housing crash. It was also the first time since then that sales exceeded 600,000.
Highest Pace in Over 10 Years
Existing home sales started 2017 with a 3.23% gain only to fall back by more than that in February. Now sales are back in the black for the year with a 4.4% jump in March. The month’s seasonally adjusted annual rate of 5.71 million sales was the highest rate since February 2007 and puts sales 5.9% above those in March 2016.
Pending home sales were down 0.8%, but the National Association of Realtors (NAR) said it was still the third best month for purchase contracts in a year. Analysts had expected the pull-back after a 5.5% increase in February and given the way sales have yo-yo’d month to month.
Price Appreciation Continues to Rise
Just as CoreLogic did earlier in the month, Black Knight Financial Services, S&P Case-Shiller, and the Federal Housing Finance Agency (FHFA) all posted annual increases in their respective February price indices that were larger than those in January. The year-over-year appreciation ranged from 5.7% (Black Knight) to 6.4% in Case-Shiller’s National Index. The latter was 0.7% higher than Case-Shiller’s January number.
Higher prices are, of course, terrific news if you already own a house, but maybe this news is hopeful for prospective buyers as well. Increasing equity may allow, or incentivize some homeowners to sell. There is already a little movement; the inventory of existing homes increased 5.8% to 1.83 million in March, although that is still far below last year’s already tight supply. The number of new homes available for sale gained, by slightly more than 1%. Rising sales however, will put those inventories under increased pressure.
Fannie Mae announced some changes to underwriting to help those with student loan burdens more easily qualify for a mortgage. There are options for both buyers and refinancers, so check in and see how they might apply to your situation.