Reversal in Home Sales Slump

Home sales appear poised to reverse their downward trend, as contract signings in each of the four major U.S. regions rose in June, according to the National Association of REALTORS®’ latest Pending Home Sales Index. The West saw the highest increase in contract signings last month, according to NAR’s report.

Contract signings are now up 1.6% year over year, ending a 17-month streak of annual decreases. NAR Chief Economist Lawrence Yun sees the increase as the likely start of a lasting trend for home sales in the coming months. “Job growth is doing well, the stock market is near an all-time high, and home values are consistently increasing,” Yun says. “When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”

Mortgage Rates Slide for Fifth Straight Week

Mortgage rates continued to inch down this week as the 30-year fixed-rate mortgage averaged 4.23 percent, Freddie Mac reports in its weekly mortgage market survey.

“Mortgage rates fell further this week following the release of weaker housing data,” Frank Nothaft, Freddie Mac’s chief economist says. “The pending home sales index fell 8.7 percent in December to its lowest level since October 2011.”

Freddie Mac reports the following national averages for the week ending Feb. 6:

  • 30-year fixed-rate mortgages: averaged 4.23 percent, with an average 0.7 point, dropping from last week’s 4.32 percent average. Last year at this time, 30-year rates averaged 3.53 percent.
  • 15-year fixed-rate mortgages: averaged 3.33 percent, with an average 0.7 point, falling from last week’s 3.40 percent average. A year ago at this time, 15-year rates averaged 2.77 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.08 percent, with an average 0.5 point, falling from last week’s 3.12 percent average. Last year at this time, 5-year ARMs averaged 2.63 percent.

Source: Freddie Mac