Existing Home Sales Disappoint But Home Price Index Rises

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Peoples Home Equity informs readers about Tuesday housing data announcements as well as comments on influential housing releases for Wednesday.

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Peoples Home Equity fully expects to see a rebound in existing home sales in the NAR’s next report for April.

Existing Home Sales slipped by just -0.2% in March which was disappointing for market participants and lenders such as Peoples Home Equity.

The National Association of Realtor (NAR) reported on Tuesday, April 22nd, that existing home sales declined from 4,600 thousand in February to 4,590 thousand in March. The decline was disappointing to see but understandable as real estate activity was dismal this winter. The NAR stated “Sales gains in the Northeast and Midwest were offset by declines in the West and South.” Only recently have home sales increased, thus a data announcement only confirming how dismal the past was does not carry as much weight as say, the weekly National Home Sale snapshot from DQnews.com or weekly mortgage applications which are seen as a leading indicator. Lawrence Yun, chief economist at NAR said “There really should be stronger levels of home sales given our population growth.” Peoples Home Equity fully expects to see a rebound in existing home sales in the NAR’s next report for April.

Another important housing announcement on Tuesday was the House Price Index from the Federal Housing Finance Agency. The index was reported to have increased 0.6% in February. However, this news was not surprising as home prices have been outperforming home sales for quite some time. Only once in the past 23 months have home prices experienced a negative month over month decline. While March is unknown, Peoples Home Equity expects to see an increase in the home price index for April.

Despite Tuesday existing home sale number, Wednesday’s announcements could shift market sentiment back positive. On Wednesday, April 23rd, new home sales and weekly mortgage applications will be released. New home sales declined from January to February, an increase in March would be enlightening for the market since new homes are critical to further housing recovery. The great impact to market sentiment for housing would probably be if mortgage applications show a second consecutive rise on Wednesday. Applications are seen as a leading market indicator and a 2 week consecutive rise has only been seen once in the past 24 weeks.

Stay tuned for tomorrow’s recap of U.S. housing reports, and remember if interested in securing a competitive, lower rate mortgage, consider speaking with a Peoples Home Equity loan officer today at: 262-563-4026.

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Giorgio U Ferrero
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