Housing market data suggests sector’s downturn ‘coming to an end’

Housing market data in recent weeks has offered some signs of stabilization as the spring selling season begins to ramp up.

According to Freddie Mac, mortgage rates are falling, with the average 30-year fixed mortgage falling to 6.28% from 6.32% a week earlier. It marked the fourth consecutive weekly decline as the banking crisis that began four weeks ago pressured Treasury rates.

The decline in rates comes as the Federal Reserve raised interest rates by a quarter point in March, continuing its aggressive campaign to reduce rapid inflation.

The yield on the 10-year Treasury note, closely tracked by the average 30-year mortgage rate, was at 3.41% at the end of the week, up from 4% in early March.

“While access to commercial mortgage loans will become increasingly difficult, residential mortgage loans are expected to become more accessible,” National Real Estate Chief Economist Lawrence Yun said in a press release.

(RJ Johnston/Toronto Star via Getty Images)

Mortgage applications fell 4.1% in the week ending March 31, according to the latest data from the Mortgage Bankers Association. Out last week.

Prior to this fall, mortgage applications had increased for four weeks.

“Mortgage rates are no longer rising, but they will continue to rise for some time,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a recent note to clients. “It’s taking off [home] If affordability is to improve, prices for heavy lifting; Prices have fallen by about 5% since the summer, but we expect a further 15% decline over the next year, restoring the pre-Covid price-to-earnings ratio.”

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Here’s where the key housing data is for the first few months of 2023.

Pending home sale

Contracts to buy existing homes in the U.S. rose in February, the third straight monthly increase. According to data released on March 29 National Association of Realtors.

Agreement signings increased in all regions of the country except the West. Pending sales rose 6.5% in the Northeast last month, with a 0.4% gain in the Midwest and a 0.7% increase in the South; Pending home sales in the West fell 2.4%.

“Affordable U.S. regions — the Midwest and the South — are leading the recovery,” Yun said.

Home Builder Sentiment

Confidence among U.S. homebuilders rose slightly in March, marking the third straight month that builders have increased confidence in the U.S. housing market.

The National Association of Home Builders/Wells Fargo’s builder sentiment index rose 2 points to 44, data released March 15 showed. Analysts had expected the index to come in at 40.

“While builders continue to deal with stubbornly high construction costs and material supply chain disruptions, they continue to report strong demand as buyers wait for interest rates to drop and turn more toward the new home market due to existing shortages. Inventory,” said NAHP President Alicia Huey of Birmingham, Ala. custom home builder and developer, wrote in a press release.

Housing begins

Housing starts rose 9.8% in February to an annual rate of 1.45 million homes, the fastest pace since last September. The Commerce Department said on March 16.

Housing starts for single-family homes rose 1.1% to an annual rate of 830,000, while multi-family housing starts rose 24% to 608,000. It started in February in all regions except the Northeast.

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Existing home sales

Existing home sales rose 14.5% in February to an annual rate of 4.58 million, the largest monthly percentage increase since July 2020. Data from the National Association of Realtors showed March 21. The increase also marks the end of a 12-month decline.

According to Bloomberg data, the annual rate of existing housing starts was higher than the 4.2 million expected by economists. The median sales price of an existing home fell 0.2% from a year ago to $363,000, NAR data showed.

“We’re seeing strong sales gains in areas where home prices are falling and local economies are adding jobs,” Yun said.

About 57% of homes sold in February were on the market for less than a month.

New home sales

New single-family home sales rose 1.1% in February to an annual pace of 640,000, up from January’s rate of 633,000. The Census Bureau report was released on March 23. This figure was 19% lower than the pace seen a year ago.

The median sales price of a new home in February was $438,200, with the median sales price reaching $498,700.

At the end of the month, the market had a seasonally-adjusted estimate of 436,000 new homes for sale, representing about an 8-month supply at current sales rates.

Zillow senior economist Orphe Divounguy wrote in a report that the low inventory suggested that “builders may still face challenges completing units while buyer demand has increased.”

Case-Shiller home prices

The S&P CoreLogic Case-Shiller US National Home Price Index fell 0.5% in January compared to the previous month, according to data released on March 28. On a year-on-year basis, the index rose 3.8% in January, up from 5.6% previously. month.

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The report’s 20-city composite index, which tracks prices in the 20 largest metros, showed prices fell 0.6% in January from the previous month and rose just 2.5% from a year ago. All 20 cities recorded lower prices in the year ending January 2023 and the year ending December 2022, the report said.

Danny Romero is a Yahoo Finance reporter. Follow her on Twitter @daniromerotv

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