May 22 2024

The inventory of existing homes for sale increased from March to April, but the increased availability didn’t bolster sales. The National Association of Realtors® (NAR) said pre-owned single-family homes, townhomes, condominiums, and cooperative apartments sold at a seasonally adjusted annual rate of 4.14 million. This was a decline of 1.9 percent from sales in both March of this year and April 2024. At the end of April, there were 121 million units of housing available for sale, an increase of 9 percent from March and 16.3 percent year-over-year. This equates to a 3.5-month supply at the current rate of sales compared to 3.2 percent and 3.0 percent at the two earlier points in time. NAR says a six-month supply is typically necessary for a balanced real estate market. There was a big increase in higher-priced homes. The inventory of available homes listed at $1 million or more was 34 percent larger than a year earlier and sales in that tier increased 40 percent. Properties typically remained on the market for 26 days in April, down from 33 days in March but up from 22 days in April 2023. NAR’s chief economist Lawrence Yan said overall home sales changed little, but the upper end of the market is benefiting from the increase supply of homes. Single-family home sales fell 2.1 percent to a seasonally adjusted annual rate of 3.74 million, down from 3.82 million in March. Sales were 1.3 percent lower year-over-year.  Condo and co-op sales remained at their March level of 400,000 units, 30,000 fewer than the previous April.

May 22 2024

Interest rates hit a seven-week low last week, boosting the level of refinancing applications for the third straight week, but those for home purchases continued to recede. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, increased 1.9 percent on a seasonally adjusted basis during the week ended May 17. On an unadjusted basis, the Index increased 1.1 percent. The Refinance Index jumped by 7.0 percent compared to the previous week and was 21.0 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 34.0 percent of total applications from 32.0 percent week-over-week.  The Refinance Index has gained an aggregate of 17 points since April 25. [refiappschart] Purchasing activity declined for the second week, this time by 1.0 percent on a seasonally adjusted basis and 2.0 percent before adjustment. The index was 11.0 percent lower than the same week in 2024. [purchaseappschart] “The 30-year fixed mortgage rate declined for the third straight week, dropping to 7.01 percent – the lowest level in seven weeks,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “ Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications . VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is still well below its historical average. Purchase activity continues to lag despite this recent decline in rates, down 11 percent from a year ago, as potential buyers still face limited for-sale inventory and high list prices. ”

May 16 2024

The latest data on new residential construction from the U.S. Census Bureau paints a somewhat mixed picture of the housing market. While housing completions surged in April, Housing starts only increased modestly and building permits declined both building permits slipped to the lowest level since last summer. The following bullet points break down the numbers in seasonally adjusted annual rates for the 3 phases of construction: Building Permits  1.44 million versus 1.48 million forecast and 1.467 last month Of that, 976k were single family permits and 408k were 5+ units Housing Starts (breaking ground phase) 1.36 million versus 1.42 million forecast and 1.29 million last month last month revised down from 1.32 million Of that, 1.031 million were single family  and 322k were 5+ Housing Completions 1.62 million versus 1.495 million last month, a 10.3 percent increase Of that, 1.092 were single family and 516k were 5+ We could attempt to over-analyze the month to month changes in this notoriously noisy data series, but in the bigger picture, permits and starts have been flat for more than a year while completions continue to improve. Zooming out a bit more, the takeaway isn't much different, but it adds context from the previous highs and also shows starts and permits remaining near pre-covid highs.