April 25, 2019 – REsimpli’s Real Estate News and Market Update
Mortgage Applications Reach Highest Level Since 2010
Data from the Mortgage Bankers Association show that mortgage applications to purchase a home increased 1% last week and are 7% higher than the same time period a year ago – these are the highest levels since April 2010. Although mortgage application volume decrease 3.5% from 2 weeks to a week ago, volume was still 14% higher compared to the same week a year ago. Refinance applications fell 8% for the week, yet they are over 26% higher than a year ago. This shows that the housing market is starting to come back. Mortgage interest rates have been rising slightly in the last 2 weeks; a 30-year fixed-rate conforming mortgage ($484,350 or less) increased to 4.44% from 4.4% with points decreasing to 0.42 from 0.47 (including the origination fee) for loans with a 20% down payment.
These 3 States Are Seeing a Large Increase in Retirees
Florida is no longer the top retirement destination, it’s now New Mexico according a survey conducted by United van Lines. The survey polled 26,998 customers who moved Nov 30, 2017 to 2018. Florida is now number two with 38% of people moving there citing retirement, and New Mexico being number one at 42%. Arizona came in third.
The top 3 states that people are leaving during retirement are New Jersey, Maine and Connecticut. The major factors driving this decision are cost of living and taxation.
Federal Reserve Key Information:
The Federal Reserve policy affects all asset prices – from housing to stocks. Thus knowing the outlook gives investors insight and better predictability of the future.
Interest Rate: On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%; they’ve kept this policy unchanged. The last release was on March 20th and they’ve decided to maintain the same rate.
Federal Reserve Outlook: The last meeting was a marked change with the Federal Reserve again changing course and saying they could “judge it appropriate to raise the target range for the federal funds rate modestly later this year” according to the Federal Reserve’s’ March 19-20 meeting. However, they did caveat that “A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year.”
Other Key Data:
Data is backward looking and takes time to compile. That’s why the February data just came out for home sales even though it’s April. Home sales data from the National Association of Realtors:
***Note the 11.8% increase in sales from January to February which is the largest monthly gain since December 2015
It’s evident that there is a tremendous spice in existing home sales for the month of February and it is no coincidence that the fixed-rate mortgages had a significant drop in rate at the same time.
Median price of existing home sales continues to creep upwards according to the data released for February.
The change from the previous year shows the median sales price is increasing steadily around about 4% per year.
The amount of homes sold from the previous year actually decreased in February compared to a year ago. The chart shows that the trend is decreasing though and looks like it may turn positive soon.
There is an increasing supply of condos and a decreasing supply of single family homes on a national level.
Sales have dropped significantly for the low end and high end market, but for both the mid end segments ($250-500, and $500-750k), there is actually an increase in sales.
Unemployment Rate: 3.8% through February 2019, a decrease from 4.0% in January