Home / Daily Dose / The Week Ahead: Changes in Home Values and Mortgage Rates
Print This Post Print This Post

The Week Ahead: Changes in Home Values and Mortgage Rates

The newest CoreLogic Case-Shiller Index will be released on Tuesday, August 27, noting home price growth and mortgage rates across the country. According to the previous report, for May 2019, home prices rose 3.4%, down from 3.5% growth the prior month.

“Growth in home prices, as measured by the Case-Shiller HPI, began to stabilize in May. The more than 100 basis point decrease in mortgage rates since November has revived home sales and given buyers additional purchasing power in the market,” said Tian Liu, Chief Economist at Genworth Mortgage Insurance. “That extra purchasing power is beginning to show up in home prices.”

The 10-city composite annual increase came in at 2.2%, which is a slight decrease from 2.3% in the previous month.

“Despite the stabilization, home price growth has slowed from over 6% in early 2018 to less than 3% in May,” Liu said. “That slowdown has made homes less attractive as an investment, especially for investors with a shorter time horizon, even though the cost of financing has decreased. This is one factor contributing to the slower than expected rebound in home sales this year.”

Las Vegas led the nation with a 6.4% year-over-year price increase, and was followed by Phoenix’s 5.7% increase. CoreLogic states that seven of the 20 cities in the composite reported higher price increases in the year ending May 2019 than the year ending April 2019.

Danielle Hale, Chief Economist for realtor.com, added the slowing of growth has stabilized as lower mortgage rates have “boosted home-buyer purchasing power.”

While stating it is promising to see price growth in the fastest growing markets, Hale said the number of markets seeing growth was seven in May compared to nine in April. Also, the first time Seattle, Washington, posted a decline, although slight, at 1.2%.

“While increased availability of homes is driving the current slowdown in price growth, looking forward, if mortgage rates remain near recent lows, we could see prices pick back up as a result of improved affordability as well as the possibility of more limited inventory availability,” Hale said.

Here's what else is happening in the Week Ahead:

FHFA House Price Index (Aug. 27)
NAR Pending Home Sales Index (Aug. 29)

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.
x

Check Also

Negative Equity Hits Record Levels

The amount of homes in negative equity fell to the lowest level in nine years, according to a new report. Here's why.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.