Numbers Count: Weekly mortgage data highlights

Karen Mayfield
Posted by Karen Mayfield
Mortgage Banking

Numbers do count to us as bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week.

The numbers: Mortgage applications fall

closeup on for sale sign with big "sold" sticker on itMortgage applications decreased 5.9% last week from the prior week, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey released April 30. Refinance applications declined 7% from the prior week, and purchase applications declined 4%, and are now down 21% from a year ago.

Meanwhile, pending home sales in March were 7.9% below where they were a year ago, according to the National Association of Realtors’ Pending Home Sales Index released April 28. Although they are down from a year ago, pending home sales did rise 3.4% in March — the first gain in 9 months.

What counts: The housing market is cooling, and that should be good news for buyers — particularly first-time homebuyers. Fewer pending sales and fewer mortgage applications suggest there are fewer buyers out there competing for homes that are on the market. This should slow the pace of housing appreciation, which has been making it more difficult for many people to afford to buy.

As for the outlook on home sales, I talked to our Chief Economist Scott Anderson this week, and he expects sales to be below last year’s levels. He said, “There will be some acceleration in home sales and starts over the balance of the year, but it won’t be enough to eliminate the effects of contraction over the past two quarters.”

The numbers: Price index shows February slowness

Home price appreciation slowed in February, according to the Case-Shiller Home Price Indices released April 29. The 10-City Composite Index was up 13.1% from a year ago and the 20-City Composite was up 12.9%. The indices were relatively unchanged from January, and prices in 13 of the 20 cities actually declined.

What counts: Slowing price appreciation is welcome news for home shoppers who have had to cope with rapid price appreciation in the past year combined with the jump last spring in mortgage rates. Homeowners who have held off putting their house up for sale in anticipation of strong price appreciation should take note. Future price gains may not be as spectacular as what we saw in 2013.

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