This Week in Real Estate: August 14, 2017


Fannie Mae released their 2017 Second Quarter Credit Supplement Report This Week in Real Estate concluding that home prices hit an all-time new high, surpassing the previous 2006 peak. Below are a few highlights from the second week of August that influence our business:

* Housing Affordability Inches Lower in Second Quarter. Arising home prices offset a quarter-point drop in mortgage interest rates to move housing affordability slightly lower in the second quarter of 2017, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. In all, 59.4 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $68,000. This is down from the 60.3 percent of homes sold that were affordable to median-income earners in the first quarter. The national median home price rose to $256,000 in the second quarter of 2017, up from $245,000 in the first quarter. Meanwhile, average mortgage rates fell 25 basis points in the second quarter to 4.08 percent from 4.33 percent in the first quarter.
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* Early Stage Delinquencies Hit Lowest Level in 17 Years. Delinquencies continued to drop in May, hitting lows not seen in the past decade or even nearly two decades, according to the latest Loan Performance Insights Report from CoreLogic. Mortgages in some stage of delinquency, 30 days or more past due, including those in foreclosure, decreased 0.8 percentage points to 4.5% of mortgages. This is down from May 2016 when the delinquency rate was 5.3%. The foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, decreased to 0.7%, down from 1% last year. The serious delinquency rate, 90 days or more past due, including loans in foreclosure, remained at 2%, unchanged from last month and down 2.6% from May last year. This rate remains the lowest since November 2007 when it was also 2%. Early delinquencies, defined as 30 to 59 days past due, also decreased slightly, hitting 1.9% in May, down from 2% last year, a 17-year low.
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* Fannie Mae: Home Prices Surpass Housing Boom Peak. Fannie Mae released its 2017 Second Quarter Credit Supplement report when it reported its earnings Thursday, which showed home prices hit an all-time new high, surpassing the previous 2006 peak. Home prices increased 2.4% in the U.S. from the previous peak in the third quarter of 2006 to the second quarter of 2017. While prices are up overall, it varies significantly from state to state. For example, North Dakota had the highest increase, seeing a growth rate of 53.7%, while on the other end of the spectrum, the growth rate in Nevada dropped 24.8% from 2006. Oregon and Washington have experienced a growth rate of 15.0% and 15.7%, respectively, during the same time period.
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Have a productive week!


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