Market Recap: Pending Home Sales Jump, Home Prices, Construction Spending Declines
Posted On July 03, 2020
Mortgage rates continue to trend lower, touching the lowest levels in the past two months. Pending home sales soared after a record decline the previous month. The S&P CoreLogic Case-Shiller home price index showed home price appreciation is sustained. US construction spending declined again.
The pending home sales index rebounded in May, up 44.3% month-over-month. The figure was the largest reported increase since the National Association of Realtors (NAR) started the index in 2001. Annually, however, the index was down 5.1%. NAR chief economist Lawrence Yun commented, “this has been a spectacular recovery for contract signings […] This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
The Case-Shiller home price index appreciated in April up 0.3% month-over-month and 4.0% year-over-year. Phoenix led the 20-city index, up 8.8% annually, followed by Seattle up 7.3% annually and Minneapolis up 6.4% annually. Home price appreciation has not been significantly impacted by the COVID-19 pandemic. Buyer demand is still strong, and inventory is still low, so home price appreciation is sustained.
US construction spending declined 2.1% month-over-month in May to a seasonally adjusted annual rate of $1.36 trillion. Residential construction fell 3.9% month-over-month but spending on public projects increased 1.2%. The data lags by one month.
Record low mortgage rates could mean a busy summer for home buyers. If you’re looking to buy a home, be prepared for a competitive market. The earlier you talk about mortgage financing the better. We’re standing by to assist with any new purchase or refinance needs.