Market Recap: Mortgage Apps Reverse, Home Prices Appreciate, Existing Home Sales Increase

Blog posted On January 24, 2020

Mortgage rates trended slightly lower this week ahead of next week’s Federal Open Market Committee (FOMC) meeting.  Mortgage application submissions reversed course and declined for the week ending 1/17, not surprising after the previous week’s substantial gains.  The Federal Housing Finance Agency (FHFA) house price index showed modest acceleration.  Existing home sales turned around after last month’s decline.

For the week ending 1/17, the Mortgage Bankers Association (MBA) weekly mortgage application survey had a composite decrease of 1.2%.  Both new purchase and refinance application submissions declined 2.0% week-over-week.  Despite the decrease, refinance applications are still near the highest level in four months as many homeowners are taking advantage of lower mortgage rates.  Black Knight estimates 8.1 million homeowners could be eligible for a lower mortgage rate with a refinance at today’s rates.

The FHFA house price index reviews a smaller data subset than the Case-Shiller home price index but is still used to review home price appreciation trends.  In November, the index appreciated 0.2% month-over-month and 4.9% year-over-year. 

Existing home sales or resales climbed 3.6% month-over-month in December to a seasonally adjusted annual pace of 5.54 million.  Available for-sale home inventory dropped form a 3.7-month supply to a 3-month supply, suggesting a competitive home buying season is ahead. 

End of year data shows that new home sales strengthened more than existing home sales in 2019.  Many home buyers may be turning to building new homes in markets with fewer existing homes for sale.  When buying a newly built home, you have the advantage of designing the home to fit your needs.  When buying an existing home, the home is most likely already move-in-ready and you may be able to meet a sooner deadline.  If you have any questions about whether to buy a new or existing home, let me know. 

Sources: CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily