Inman

Daily market update: June 27, 2017

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We’ll add more market news briefs throughout the day. Check back to read the latest.

Most recent market news

Tuesday, June 27

Zillow Mortgage Rate Ticker

“Mortgage rates were flat last week and we expect the relative calm to continue leading up to the Fourth of July holiday,” said Erin Lantz, vice president of mortgages at Zillow. “Lenders are likely to price conservatively going into the holiday weekend. A couple of Fed speeches midweek could push small movements in rates, but overall we expect another quiet week.”

Case-Shiller

“As home prices continue rising faster than inflation, two questions are being asked: why? And, could this be a bubble?” said David M. Blitzer Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up. The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising. At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four- month supply. Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue.”

CoreLogic Housing Credit Insights, Q1 2017

“Mortgage rates during the first quarter of 2017 were up about 0.5 percentage points from a year earlier,” said Frank Nothaft, chief economist at Core Logic. “Since 2009, for every one-half percentage point increase in mortgage rates, the average credit score on refinance borrowers has dipped by 9 points, and this pattern will likely continue if mortgage rates move higher. That is because when rates rise, applications drop off and loan officers spend more time with the applicants that have less-than-perfect credit scores, require more documentation or have unique property issues.”

News from earlier this week

Monday, June 26

Affordability Increases Despite Tightening Domestic Monetary Policy, According to First American Real House Price Index

“Despite the monetary tightening policies of the Federal Reserve, a dip in the average rate for a 30-year, fixed-rate mortgage and wage gains increased consumer house-buying power sufficiently to offset the gain in unadjusted house prices. The decline in real, purchasing-power adjusted house prices between March and April was the largest month-over-month decline since July 2016,” said Mark Fleming, chief economist at First American. “While this is welcome news for home buyers, the number of homes listed for sale is not meeting consumer demand and markets are getting tighter. As a result, affordability declined 11 percent on a year-over-year basis. That’s a bigger drop in affordability than the 5.7 percent caused by unadjusted house-price appreciation alone and reflects the impact of rising interest rates and tightening supply.”

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