Home Purchase Mortgage Calculators
Mortgage Program Calculators
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 January 2015 showed that existing home sales in December 2014 increased 2.4% on a month-over-month basis to an annualized 5.04 million units (so if you take the home sales figure for December and multiplied it by twelve), which came in at the high end of industry analyst expectations. The number of existing homes available for sale, known as supply, decreased by 23,000 units to 1.85 million units as compared to 2.08 million units in November. The 1.85 million unit supply figure represents 4.4 months of supply available on the market, down from 5.1 months of available supply in November. The median existing home sales price increased 6.0% on a year-over-year basis and 1.1% on a monthly basis to $209,500 as compared to $205,300 in November. Low interest rates and relatively mild winter weather in December boosted existing home sales, in a positive development to end the year. (Source: Bloomberg)
What it Means for Mortgage Borrowers
The boost in existing home sales suggests that home buyers became more active in the real estate market following the drop in interest rates at the end of 2014. Although the report showed positive purchase activity, the decline in housing supply and uptick in prices could be negative factors for the mortgage and real estate markets going forward. A reduction in supply and increase in prices makes finding an affordable home more challenging for home buyers, especially first-time home buyers who have been reluctant to enter the market. Low interest rates, however, offset these factors by making owning a home more affordable. Use the Mortgage Selector Calculator on FREEandCLEAR to determine what size mortgage you can afford and the mortgage program that is right for you and check out mortgage rates and fees for lenders in your area using our INTEREST RATES feature.
The FREEandCLEAR Mortgage Expert