Sales of Existing Housing Rose in October; Fed Hike Could Affect Numbers
President-elect Donald Trump has spent the six weeks after the 2016 election lining up nominees to fill his cabinet. As might be expected, some have applauded the selections; others have condemned them. Meanwhile, the Federal Reserve this week increased a key interest rate. The effects of that rate on housing markets won’t be known for some time, but it’s important to track where various indicators stand with a month or so to go before Trump takes office.
The Fed’s change in the short-term interest rate was from the existing range of .25 percent to .5 percent to the new span of .5 percent to .75 percent. It also predicted three increases for 2017.
Following are relevant numbers on housing sales, construction, foreclosures and more.
As of Dec. 15, the average 30-year fixed rate mortgage increased to 4.18 percent, up from 3.87 percent on the same date in November, according to Bloomberg.com. What does that mean for someone buying a house today? Assuming the buyer was purchasing a $250,000 home, with a 20% down payment, the monthly payment (principal and interest only) would be nearly $976 a month; on Nov. 15, the monthly payment would have been about $940.
Pending home sales: The numbers reflection situations wherein a contract has been signed but the sale has not closed. The numbers for October, the latest month for which statistics were available, increased .1 percent, according to the National Association of Realtors Pending Home Sales Index. NAR’s chief economist, Lawrence Yun, says the index stands about 1.8 percent higher than the same month of 2015. He believes housing sales will top out this year at 5.36 million, up from 5.25 million in 2015.
Existing home sales: These transactions increased by 2 percent in October, according to NAR, to 5.6 million homes. That was up 5.9 percent over October 2015.
Housing affordability: The NAR says the median price of an existing single-family home stood at $233,700 in October, down from $236,900 in September but increased from $220,600 in October 2015. The median price was significantly lower – $182,500 – for homes in Midwest and significantly higher – $348,800 – for homes in the West.
Median sales price of a foreclosure home: In October, this stood at $130,000, according to RealtyTrac, slightly higher than the number for September. However, it was about 44 percent lower than the median sales price for non-distressed home.
National Housing Scorecard: The federal Department of Housing and Urban Development compiles this monthly report. It says new home purchases fell 1.9 percent in October to about 563,000. That was still up 17.8 percent from the same month of 2015. Foreclosure starts began on 43,352 homes, up 25 percent from September. However, that was still an 11 percent drop from October 2015.
Housing starts and building permits: According to the National Association of Home Builders, about 1.05 million housing units were started in September. Of those, about 781,000 were single-family homes. Also in September, more than 1.2 million building permits were issued.
Where will the numbers once the interest rate changes become a factor? GoodCall will continue to track them.