January 28 2025

Both S&P Case-Shiller and the FHFA released national home price indices this morning. In both cases, November's prices were slightly higher than expected.  For the Case Shiller data, this meant that prices declined less than expected. Unlike FHFA prices, Case Shiller is NOT seasonally adjusted--something that is immediately apparent when viewing a month-to-month chart. November is frequently near the low point of any given year for price appreciation. This month's 0.1% decline is an improvement from October's 0.2% decline or the 0.3% drop from last November. Regionally, Boston and New York were top performers in November, but only NY and Chicago were over 6% year over year. As seen in the table above and the chart below, prices are easily in positive territory in year-over-year terms.  The same is true for FHFA, which is seeing almost the exact same change as Case Shiller.  In addition, both indices have been fairly flat in the low 4% range recently.

January 24 2025

It's no mystery that 2024 hasn't been a stellar year for home sales and many other housing metrics. Today's release of December's Existing Home Sales from the National Association of Realtors (NAR) confirmed that.   Bad news first: with December in the books, 2024 goes down as the worst year for existing sales since 1995, just barely edging out 2008.3 The good news is that 2024 is over and we ended the year on the upswing in terms of month-to-month and year-over-year momentum. In addition to 3 straight months of improvement and the best sales pace since February, December's annual pace of 4.24m is 9.3% higher than last December and the largest annual increase since June 2021 (to be clear, the 12 months in 2024 added up to the lowest level of any year since 1995, but this month's pace was the best since mid 2021 when compared to the same month from the previous year). “Home sales in the final months of the year showed solid recovery despite elevated mortgage rates,” said NAR Chief Economist Lawrence Yun. “Home sales during the winter are typically softer than the spring and summer, but momentum is rising with sales climbing year-over-year for three straight months. Consumers clearly understand the long-term benefits of homeownership. Job and wage gains, along with increased inventory, are positively impacting the market.” full release...

January 24 2025

The Mortgage Bankers Association's (MBA) weekly mortgage application survey showed a modest decrease in refinance applications and an even more modest increase in purchase applications. At these levels of movement, it's just as fair to say that applications generally held steady. That's a good thing for purchases considering last week was already at the highest levels in nearly a year, but again, there's no real change from the previous week. The more we zoom out, the more sobering the context becomes. The counterpoint is that this context is also optimistic because short of a major meltdown in the housing/mortgage market, there's really nowhere to go but up. Refinance demand will always be more closely tied to interest rates.  As such, it's no surprise to see low levels persist as rates remain elevated compared to the lows seen several months ago. On a positive note, present levels are still about 30% higher than the late 2023 lows.  The big picture view of refi apps reminds us of a different time, when each new long-term low in rates meant that most mortgage holders could benefit from a refi.   Other highlights from this week's data: Refis accounted for 40.4% of the total, down from 42.7 last time Adjustable rate mortgages accounted for 5.5% of the total FHA loan were 16.5% of the total, down from 16.9% VA loans were 14.6% of the total, down from 15.7%