According to the NAR’s chief economist, Lawrence Yun, the worst is over. He noted that “Existing-home sales, pending contracts, and new-home construction pending contracts have turned the corner and climbed for the past three months.” As we settle into the spring season, we should start to see housing activity continue its upward trajectory and, if mortgage rates move lower, we could see some frozen buyers warm up to their home search.
Last week, we received Pending Home Sales data from February and, as Lawrence Yun stated, it was a good report. For the third consecutive month, Pending Home Sales rose. While sales were still down 21% from last year, we are definitely seeing improvements as the January report showed an annual decline of 24%. Baby steps!
In home appreciation news, the January Case-Schiller and FHFA indexes were posted and they seem to report conflicting data but the numbers differ because the FHFA index only measures appreciation on single-family homes with conforming loan amounts (no cash buyers or Jumbo loans).
The Case-Shiller Home Price Index reported a decline in home prices of 0.5% but they still remained almost 4% higher than January of last year. Conversely, the FHFA’s House Price Index showed that home prices increased by 0.2% in January with an annual increase of 5.3%.
Next week, we’ll be taking a look at some labor data as the ADP Employment and BLS Jobs Reports for March are posted. Similar to much of the forward-looking housing market reports, this labor data will give us some insight into the future of real estate. Stay tuned for next week’s breakdown!
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