Market Recap: Home Values Go Up, New Home Sales Increase, Pending Home Sales Fall
Posted On May 29, 2020
Markets were closed on Monday, in observance of the Memorial Day holiday. Mortgage rates remain historically low. Home price appreciation continued. New home sales turned around. Pending home sales declined.
The S&P CoreLogic Case-Shiller home price index continued to post positive numbers in March, with a month-over-month increase of 0.5%. Annually, the 20-city index is up 3.5%. Phoenix, AZ led the index with an annual appreciation rate of 8.2%, followed by Seattle, WA with an annual appreciation rate of 6.9%. Since the data lags by one month, it does not fully reflect the impact of coronavirus shutdowns on home prices, but housing professionals do not expect home values to fall.
New home sales, or the sales of newly constructed homes, unexpectedly increased in April, up 0.6% month-over-month. Year-over-year, however, sales declined 6.2%. Regionally, the data was mixed. The Northeast experienced the largest month-over-month gains up 8.7%, followed by the Midwest and South, each up 2.4%. The West experienced a 6.3% decrease. George Ratiu, senior economist, at Realtor.com, explained the impact stay-at-home orders has had on home shoppers, stating, “as consumers spent long weeks at home, they discovered the value of additional space and updated kitchens. As remote work policies are being extended into 2021 by a growing number of companies, and likely to become permanent in some cases, demand for home offices is projected to grow.”
Pending home sales, or the total of signed contracts, declined 21.8% month-over-month in April, and 33.8% year-over-year. Each region experienced a decrease. Lawrence Yun, chief economist of the National Association of Realtors (NAR), expects the declines to be temporary forecasting, “in the coming months, buying activity will rise as states reopen and more consumer feel comfortable about [buying a home] in the midst of social distancing measures.”
Is your current home’s layout sustainable for prolonged working from home or could you use some extra office space? Are you satisfied with your home’s feature or ready for an upgrade? Are you happy renting or are you ready for a more permanent move? If you have any questions about today’s rates or making mortgage moves, let us know.