2021 Weekly Housing Market Monitor June 28-July 1 National Association of REALTORS Research Group - National Association ...

2021
Weekly Housing Market Monitor
June 28-July 1
National Association of REALTORS®
Research Group

Weekly Housing Market Monitor
 Pending Home Sales Bounce Back 8.0% in May 2021

Pending home sales pulled a surprise lift in May, rising 8% from the prior
month, and 13.1% from one year ago, the highest reading in May since 2005.

The increase in pending home sales in May could be due to the decline in the
30-year fixed rates in May (2.96%) after rising above 4% in March and April, as
well as a slight increase in the inventory of homes.

Contract signings rose in all regions in May compared to the prior month and
one year ago.

Weekly Housing Market Monitor
Preliminary Data: New Contract Signings in Past Four
        Weeks Down 6% from One Year Ago
While pending home sales rose in May, that may be just a spike. Mortgage
rates rose to over 3% and surging home prices deeply eroded home
affordability. Preliminary data on contract signings indicate that new
contract signings fell in June by 6.3% from one year ago.

Meanwhile, more new listings came on the market, with new listings in the
past four weeks up 6.9% from one year ago.

However, total active listings are still down 31% from one year ago. Total
pending listings are normalizing from the surge in the second half of 2020
and are up 13% year-over-year.

Weekly Housing Market Monitor
 S&P CoreLogic Case-Shiller Home Price Index Shows
  Home Prices Rose at Highest Annual Pace of 15%
Home prices measured at a constant level of quality by using only repeat
sales data rose 14.6% in April 2021, according to the S&P Core Logic Case-
Shiller Index. This is the highest appreciation since October 1979 (14.8%)*.

The fastest price gains were in Phoenix, San Diego, and Boston, with home
prices up over 20%.

NAR reported last week that the median sales price of single-family homes
rose 24.4% year-over-year in May 2021 while the median sales price of total
existing-homes (single-family and condos/coops) rose 23.6%. These are the
highest readings since 1969 and 1999, respectively**. NAR’s median sales
price captures the mix of homes for sale, with fewer homes for sale in the
price range of $100,000 to $249,999 (-2%) in May 20201.

* The index is based
on sales over a
rolling 3-month
period of single-
family homes that
have sold twice
(repeat sales) to
capture the true
appreciated values
of each sales unit .
The April reading
captures price
changes over the
period February,
March, April. Read
more.

**NAR tracked
condominium sales
only in 1999 so the
median sales price of
existing-home series
starts in 1999.
However, single-
family homes
comprise about 80%
of total existing-
home sales.

Weekly Housing Market Monitor
Weekly Mortgage Purchase Applications Decline 5%
               from Prior Week
After rising for three weeks, mortgage purchase applications fell 4.8% from
the prior week and decreased 17% from one year ago, according to the
Mortgage Bankers Association's (MBA) Weekly Mortgage Applications
Survey.

Conventional home purchase loan applications (Fannie/Freddie guaranteed
loans) fell 4.6% from the prior week while government-insured loan
applications (FHA/VA/USDA) fell 5.5%. Government loan applications (FHA,
VA, USDA) which typically cater to first-time borrowers have declined since
2020, an indication that first-time buyers are having a tougher time obtaining
a mortgage.

Refinancing applications also decreased 8.2% from the previous week.

Weekly Housing Market Monitor
  30-Year Fixed Mortgage Rate Rises to Over 3%;
Monthly Mortgage Payment Up $276 from a Year Ago
After hovering at below 3% for four weeks, the 30-year fixed mortgage rate
rose to 3.02%, while the 10-year T-note slightly fell to 1.50%.

Chief Economist Lawrence Yun expects the 30-year fixed mortgage rate to
move towards 3.5% by the end of 2021 and the inflation rate to average 2.7%
in 2021. Even with higher inflation, the Federal Open Market Committee has
kept the federal funds rate at 0 to 25 basis points as it sees the current
inflation rate to be transitory, mainly arising from a temporary rebound in
consumer spending.

The estimated monthly mortgage payment as of June 25 rose to $1,426, up
$276/month from one year ago, making a home purchase less affordable. In
April, NAR’s Housing Affordability Index fell to 155.8.

Weekly Housing Market Monitor
        Number of Loans in Forbearance Declines
               to Below 4% to 2 Million
The fraction of loans in forbearance fell further to 3.91%, with 2 million loans in
forbearance plans, according to the Mortgage Bankers Association.

Most distressed borrowers are working out payment options with lenders to
keep their homes, with 76% of homeowners in forbearance having a loss
mitigation plan. Of the homeowners who exited forbearance during June 1,
2020-June 13, 2021, 7.5% exited forbearance by refinancing their home or
selling their home and less than 2% ended in a short sale or deed-in-lieu (and
other reasons).

However, 15.2% of borrowers have exited forbearance without a loss
mitigation in place, which can put these borrowers in distress later on. With
an average of 2.6 million loans in forbearance during September 2020-June
20, 2021, that yields about 400,000 borrowers who exited without a loss
mitigation plan. This is equivalent to only about 1 month of the current pace
of existing-home sales (483,333) and should not cause a drop in home prices.

NATIONAL ASSOCIATION OF REALTORS®
RESEARCH GROUP

Lawrence Yun, PhD
Chief Economist & Senior Vice President

Jessica Lautz, Doctor of Real Estate
Vice President, Demographics and Behavioral Insights

Gay Cororaton
Senior Economist and Director of Housing and Commercial Research

Nadia Evangelou
Senior Economist and Director of Forecasting

Meredith Dunn
Research Manager

Michael Hyman
Research Data Specialist

Hua Zhong
Data Scientist

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NATIONAL ASSOCIATION OF REALTORS®
RESEARCH GROUP

The Mission of the NATIONAL ASSOCIATION OF REALTORS® Research Group is to
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RESEARCH GROUP
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