Housing market activity is up or down – depending on the report. Commenting on the latest National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI), NAR Chief Economist Lawrence Yun said, “We are seeing a positive sentiment from consumers about home buying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable.” Yun’s comments were released the same day that the Mortgage Bankers Association (MBA) reported a 7.3% drop in mortgage applications. The PHSI examined monthly activity, while the MBA’s Market Composite Index (MCI) numbers examined one week.
Though mortgage interest rates continued to climb according to Freddie Mac’s Primary Mortgage Market Survey for the week ending April 25, the rates for a 30-year fixed rate mortgage are down year-over-year in addition to their steep drop from November 2018 peaks.
Homeowners who sold in the first quarter of this year realized an average gain of $57,500 from the purchase price according to the Q1 2019 Home Sales Report (HSR) from ATTOM Data Solutions. Using the HSR’s current average homeowner tenure of 8.05 years and the median gains, home sellers in Q1 19 saw an average 31.5% return on their original purchase price.
In Freddie Mac’s latest mortgage rate forecast, Chief Economist Sam Khater said, “While mortgage rates have risen in recent weeks, they remain lower than they were a year ago and wage growth has accelerated and is finally growing at the same rate as home prices for the first time in seven years. We expect to see the result of these low mortgage rates and stronger wage growth translate into better home sales in the coming months.”