Blog posted On July 03, 2020
Mortgage rates continue to trend lower, touching the lowest levels in the past two months. Pending home sales soared after a record decline the previous month. The S&P CoreLogic Case-Shiller home price index showed home price appreciation is sustained. US construction spending declined again.
The pending home sales index rebounded in May, up 44.3% month-over-month. The figure was the largest reported increase since the National Association of Realtors (NAR) started the index in 2001. Annually, however, the index was down 5.1%. NAR chief economist Lawrence Yun commented, “this has been a spectacular recovery for contract signings […] This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
The Case-Shiller home price index appreciated in April up 0.3% month-over-month and 4.0% year-over-year. Phoenix led the 20-city index, up 8.8% annually, followed by Seattle up 7.3% annually and Minneapolis up 6.4% annually. Home price appreciation has not been significantly impacted by the COVID-19 pandemic. Buyer demand is still strong, and inventory is still low, so home price appreciation is sustained.
US construction spending declined 2.1% month-over-month in May to a seasonally adjusted annual rate of $1.36 trillion. Residential construction fell 3.9% month-over-month but spending on public projects increased 1.2%. The data lags by one month.
Record low mortgage rates could mean a busy summer for home buyers. If you’re looking to buy a home, be prepared for a competitive market. The earlier you talk about mortgage financing the better. We’re standing by to assist with any new purchase or refinance needs.