Existing Home Sales Fizzle
In our effort to cover important trends that affect the mortgage market, FREEandCLEAR keeps a close eye on existing home sales, which is the number of previously constructed housing units that are sold in a month. The existing home sales figure is reported separately from the new home sales figure, which is the number of newly constructed homes that are sold in a month. An increase in existing home sales reflects improvement in the housing market while a decrease in existing home sales reflects a weakening of the housing market. In addition to reporting the number of housing units sold, the existing home sales report also includes information on the supply of units for sale as wells as the median and average existing home sales price.
The existing home sales report, issued on a monthly basis, includes statistics for the prior month. The report for March 2015 showed that existing home sales in February increased 1.2% on a month-over-month basis to an annualized 4.88 million units (so if you take the home sales figure for February and multiplied it by twelve), which came in within industry analyst expectations. On a year-over-year basis, existing home sales increased 4.7%, the highest reading since October 2013. Single family existing home sales outpaced multi-family properties with single family existing home sales increasing 1.4% on a monthly basis and 5.9% on a year-over-year basis as compared to multi-family property sales which were flat on a monthly basis and declined 3.6% on year-over-year basis. The small increase in existing home sales led to a small decrease in available inventory to 4.6 months of supply available on the market down from 4.7 months of supply in January 2015. The median existing home sales price increased to $202,600 which represents a 2.5% increase on a monthly basis and a healthy 7.5% increase on a year-over-year basis. Although mostly positive, the existing home sales report for March underscores the lack of any true strength or momentum in the housing and mortgage markets. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The most noticeable developments in the March existing home sales report for mortgage borrowers were the upticks in single-family purchase activity and the median home sales price. Despite poor weather across much of the country, home buyers increased purchases of single family properties. The decline in existing home sales price reported for January and continued low interest rates may have brought buyers into the market. The increase in median existing home sales price reported for February is something FREEandCLEAR will continue to monitor as rising home prices makes purchasing a home less affordable for prospective buyers. Existing home inventory remains relatively low but steady suggesting that there are opportunities for home buyers in the marketplace. Use our Mortgage Qualification Calculator to determine how much home you can afford at today’s low rates and use our INTEREST RATES feature to compare mortgage rates and fees for lenders in your area.
The FREEandCLEAR Mortgage Expert
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