Mortgage Economic Update – April 20, 2017

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Mortgage Rates – 30 year drop below 4% for first time in 5 months Mortgage rates dropped for the fourth straight week. The April 20, 2017 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 3.97%, down from 4.08% last week. The 15 year fixed was 3.23%, down from 3.34% last week. The 5-year ARM was 3.10%, also down from 3.18% last week. Rates increased slightly near the end of the week so next week’s average should be slightly higher.

California home sales and prices strong in March – Low inventory pushes prices upThe California Association of Realtors reported that home sales totaled 416,580 in March on a seasonally adjusted annualized rate. That represented a 4% increase from February’s pace and a 6.9% increase from last March. The Los Angeles Region was even stronger. It saw an 8.5% year over year increase in sales from March 2016. The median price paid for a home in California was $517,020. It increased 8% month over month from $478,570 in February. We did see month over month prices down in January and February, so the 8% rebound made up those declines. Year over the year the median price was 6.8% higher than $484,120 last March. Inventory levels decreased as less people put their homes up for sale. The unsold inventory index dropped one full month to a 3 month supply of homes for sale. That’s down from a 4 month supply in February. A 3 month supply of homes for sale is the lowest March reading ever.

U.S. Existing home sales at highest pace in over 10 years in March – The National Association of Realtors reported that sales of single family homes increased 4.4% in March to an annualized adjusted rate of 5.71 million homes. March’s sale pace is 5.9% higher than March 2016. It was the highest monthly rate of sales since February 2007. Year over year the median price paid for a home nationwide increased 6.8% from last March. It was the 61st consecutive month of year over year price gains. The number of homes for sale has dropped year over year for 22 straight months. Nationally there is just a 3.8 month supply of homes for sale. The National Association of Realtors single family home figures include sales of detached homes, condominiums, town-homes, and co-ops.