Global| Apr 22 2020U.S. FHFA House Prices Increase Pre-Coronavirus
by:Tom Moeller
|in:Economy in Brief
Summary
• Home prices remained firm in mid-winter. The Federal Housing Finance Agency (FHFA) Price Index increased 0.7% during February following a 0.5% rise in January, revised from 0.3%. The 5.7% y/y gain had been fairly steady since early [...]
April 22, 2020
• Home prices remained firm in mid-winter.
The Federal Housing Finance Agency (FHFA) Price Index increased 0.7% during February following a 0.5% rise in January, revised from 0.3%. The 5.7% y/y gain had been fairly steady since early last year. Over the past three months, the increase in prices improved to 8.1%, the strongest increase since April 2017.
Monthly price increases were strongest in the Middle Atlantic (5.8% y/y), East North Central (5.3% y/y), Mountain (8.1% y/y) and West North Central (5.6% y/y) regions of the country.
Somewhat smaller monthly gains were logged in the Pacific (6.2% y/y) and East South Central (5.8% y/y) areas of the country.
Lower monthly increases occurred in the South Atlantic (6.1% y/y), New England (4.6% y/y) and West South Central (4.2% y/y) regions of the country.
Note that these data are for February and were unlikely to have been impacted by the coronavirus outbreak.
The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancings on the same kinds of properties. The indexes are based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The FHFA data are available in Haver's USECON database.
| FHFA U.S. House Price Index, Purchase Only (SA %) |
Feb | Jan | Dec | Feb Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total | 0.7 | 0.5 | 0.8 | 5.7 | 5.3 | 6.6 | 6.4 |
| New England | 0.4 | 0.5 | 0.8 | 4.6 | 4.5 | 5.3 | 5.6 |
| Middle Atlantic | 1.2 | 0.7 | 0.3 | 5.8 | 4.5 | 5.4 | 4.8 |
| East North Central | 1.0 | 0.5 | -0.1 | 5.3 | 5.5 | 6.5 | 5.9 |
| West North Central | 0.9 | 0.3 | 0.9 | 5.6 | 5.1 | 6.1 | 5.2 |
| South Atlantic | 0.4 | 0.7 | 0.9 | 6.1 | 5.8 | 7.2 | 6.6 |
| East South Central | 0.7 | 0.7 | 1.1 | 5.8 | 5.8 | 6.1 | 5.6 |
| West South Central | 0.3 | -0.4 | 1.4 | 4.2 | 4.7 | 5.3 | 6.2 |
| Mountain | 1.0 | 0.3 | 1.3 | 8.1 | 7.1 | 9.1 | 8.4 |
| Pacific | 0.8 | 0.8 | 0.6 | 6.2 | 4.7 | 7.5 | 8.5 |
U.S. Mortgage Applications & Interest Rates are Little Changed
by Tom Moeller April 22, 2020
• The housing market remains weak.
• Financing rates are low.
The Mortgage Bankers Association reported that its Mortgage Loan Application Index eased 0.3% (+70.0% y/y) in the week ended April 17 after the prior week's 7.3% increase. Applications for refinancing slipped 0.8% w/w (+225.3% y/y) after improving 10.1% in the previous week. Purchase applications increased 2.1% w/w but fell by roughly one-third y/y.
The effective interest rate on a 15-year fixed-rate mortgage of 3.12% was little changed over the last three weeks. The effective interest rate on the 30-year fixed-rate mortgage of 3.54% was close to the record low for the series which dates back to 1990. The effective rate on a 30-year Jumbo mortgage edged up to 3.91% from 3.87%. The rate on the 5-year adjustable rate mortgage declined to 3.23% and reversed the increases of the prior five weeks.
The average mortgage loan size declined to $305,800 (-6.3% y/y). That was down from the $367,900 high reached early in March. The average loan size of refinancings fell sharply to $301,600 (-2.9% y/y) from $372,100, a high last month. The average loan size for purchases rose slightly to $318,500 (-5.4% y/y) but also was below its early-March high.
Home buyers and owners continue to lock in currently low levels of interest rates. Applications for fixed-rate loans increased 87.5% y/y, while applications for adjustable rate loans fell 21.3% y/y.
The survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for each index is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.
| MBA Mortgage Applications (%, SA) | 04/17/20 | 04/10/20 | 04/03/20 | Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total Market Index | -0.3 | 7.3 | -17.9 | 70.0 | 32.4 | -10.4 | -17.8 |
| Purchase | 2.1 | -1.8 | -12.2 | -31.1 | 6.6 | 2.1 | 5.6 |
| Refinancing | -0.8 | 10.1 | -19.4 | 225.3 | 71.1 | -24.3 | -34.0 |
| 15-Year Effective Mortgage Interest Rate (%) | 3.12 | 3.11 | 3.10 | 3.98 | 3.71 | 4.35 | 3.59 |
| 30-Year Effective Mortgage Interest Rate (%) | 3.54 | 3.53 | 3.57 | 4.59 | 4.34 | 4.94 | 4.32 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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