Tag Archive: Zonda Newsfeed

  1. April Zonda Newsfeed: Home Sales Up 6% Year-To-Date

    April Zonda newsfeed

    We now have a glimpse into spring selling season trends, and for the most part, the housing market has been trending positively. Mortgage rates remain historically low at 4.58%, even after rising 63 basis points since the start of the year. The median new home price rose 6% year-to-date this year compared to the same time last year. The combination of rising mortgage rates and prices have negatively impacted affordability. Comparing 1Q17 to 1Q18, the monthly payment for the median priced new home is 7% higher. That’s on top of growing 11% from 1Q16 to 1Q17. Even with this rise in housing costs, home sales are resilient. Purchase mortgage applications, our preferred gauge of home sales, grew 6% year-to-date compared to the same time last year.

    Ali Wolf, Director of Economic Research

    Price Appreciation Continues

    Median existing home prices have recorded year-over-year gains for 73 consecutive months. 

    • The US median price for a detached single-family home rose to $252,100. Current prices are 6% higher than last year and 13% above March 2016 levels
    • Both detached and attached home prices are 6% higher in 1Q18 compared to 1Q17
    • Home prices in the West reported the largest gains, up 8% YOY
    • The Midwest remains the most affordable region, with a median home price of $192,200

    More Supply Coming Down The Pike?

    Total housing starts grew 11% year-over-year, led by the multifamily sector. 

    • Multifamily housing starts accelerated 24% compared to last year. While the margin of error is high for this data set, looking at the quarterly trend, we see an 8% jump compared to the first quarter in 2017
    • Single-family housing starts increased a steady 5% YOY and are now 16% higher than the 748,000 in March 2016

    Treasury Yields Hit 3% Threshold

    Investors have long cautioned that a 3% yield is a threshold we should pay attention to.

    • This is the first time since 2014 that 10-year bond yields have hit the 3% mark. Bond prices and yields are negatively correlated, so higher yields suggest there’s optimism about the current state of the economy
    • 10-year Treasury yields are a moving target, and are currently range-bound between 2.8% and 3.0%. Short-term yields have also risen
    • Going forward, however, there are some implications for the broader debt markets. Rising bond yields generally impact mortgage rates, interest on auto loans, and other lending categories. They also can eat into corporate profits

    INSTANT HOUSING INSIGHTS WITH ZONDA

    Zonda updates housing data instantly in real time, so you don’t have to wait monthly or weekly for the latest insights. Plus, you’ll have access to over 50 Market Reports full of rich infographics and news highlights spanning coast-to-coast. Curious?

    GET A FREE ZONDA DEMO »

  2. March Zonda Newsfeed: Strong Momentum For Spring Selling Season

    MARCH ZONDA NEWSFEED

    It’s no surprise that the Federal Reserve, with Jerome Powell at the helm, decided to continue the normalization process by raising rates this week. The move was well communicated, and it set the tone for a high likelihood of two more increases this year. Inflation concerns were downplayed in the prepared remarks, but there are hints on the consumer side that more is on the way. While the housing industry is worried about the corresponding rising mortgage rates, demographic tailwinds and buyer urgency point to another strong spring selling season.

    Ali Wolf, Director of Economic Research

    Price Stability Persists

    The Consumer Price Index (CPI) grew 2.2% YOY.

    • Core CPI, a more stable indicator that strips out highly volatile food and energy prices, increased 1.8% YOY
    • While the 2.2% looks above the 2.0% target that the Fed outlines, CPI is not their preferred measure of inflation. The Personal Consumption Expenditure Index, the measure closely followed by the Fed, grew 1.7% YOY, similar to the growth in December
    • Higher inflation could cause the bond market to react and drive up yields, which are directly correlated with mortgage rates. Higher inflation could also trigger the Fed to raise interest rates more aggressively, also influencing mortgage rates and overall economic growth

     

    Consumer Confidence At Highest Level Since 2000

    The index came in at 130.8 in February, which is the highest reading since November 2000.

    • The primary driver of this consumer confidence read is the strong labor market. Nonfarm payrolls have increased for 89 consecutive months, the longest stretch on record
    • Looking forward, the Expectation Index rose 5.5% MOM. The reading reflects consumer optimism for the future state of the economy
    • The Fed chair noted that consumers will drive economic growth going forward as household balance sheets improve

     

    Strong Momentum For Spring Selling Season

    Housing market shows strength over last year despite higher mortgage rates.

    • Purchase mortgage applications rose 1.4% compared to last week and 4.0% above last year. The 30-year fixed-rate mortgage currently sits at 4.45%, higher than 4.44% last week and 4.23% last year
    • Mortgage applications are a leading indicator of the housing market that gives a pulse of future purchase activity. For example, the purchase mortgage data is updated through mid-March, while the existing home data released this week lags as its shows data through February
    • With mortgage rates steadily climbing since the new year, the refinance share of applications declined to 38.5%, the lowest level since 2008

     

    INSTANT HOUSING INSIGHTS WITH ZONDA

    Zonda updates housing data instantly in real time, so you don’t have to wait monthly or weekly for the latest insights. Plus, you’ll have access to over 50 Market Reports full of rich infographics and news highlights spanning coast-to-coast. Curious?

    GET A FREE ZONDA DEMO »

  3. Potential Inflation Largely To Blame For Market Correction

    Zonda Newsfeed

    On Monday, the Dow Jones Industrial Average had its single largest one-day point drop ever. As of writing this, it seems the selloff has leveled out, but the question remains, what happened? It’s hard to pinpoint the exact catalyst of the correction, but the most obvious culprit is inflation (algorithmic trading has also been blamed). Although the 2.9% increase in wages from January’s employment report is great for consumers, it fuels inflation fears and corresponding worries that the Fed will need to raise short-term rates quicker than anticipated. The new Fed Chair, Jerome Powell, is expected to push three rate hikes this year, but he may need to change policy if the economy shows signs of overheating.

    Ali Wolf, Director of Economic Research

    Low Housing Supply Continues To Drop

    Resale inventory totaled 3.2 months of supply in December, which is far below the 6.0 equilibrium level.

    • Housing supply has dropped year-over-year for the past 25 months
    • There were a total of 1.48 million units available for sale at the end of December, down 10.3% from last year.
      The lack of inventory is pushing prices up and lowering affordability, especially in the face of the aforementioned healthy housing demandMonths of Existing Home Inventory Zonda
    Low Supply + High Demand = Price Appreciation

    The Case-Shiller 20-City Composite Index for November increased 6.4% YOY. The national index also rose by 6.2% over the same period.

    • This is the 67th month of continuous year-over-year growth. While this is positive for existing homeowners, home prices are rising three times faster than inflation and more than twice as fast as wages making it difficult (but not impossible) for entry-level buyers to enter the market.
    • Markets with the largest YOY gains include Seattle (+12.7%), Las Vegas (+10.6%), and San Francisco (+9.1%)
    Millennials Drive Up Homeownership Rate

    The homeownership rate rose from 63.9% to 64.2% in the fourth quarter. This is the third quarter of growth, but remains below the historical average of 65.4%.

    • Millennials had the largest year-over-year increase in homeownership among any age group
    • The ownership rate among those under 35 increased to 36.0% from 34.7% a year earlier. This is in-line with the data we collect about Millennials each year, which shows 35% of those 28 and older want to own a home in the next 1-3 years.
    INSTANT HOUSING INSIGHTS WITH ZONDA

    Zonda updates housing data instantly in real time, so you don’t have to wait monthly or weekly for the latest insights. Plus, you’ll have access to over 50 Market Reports full of rich infographics and news highlights spanning coast-to-coast. Curious?

    GET A FREE ZONDA DEMO

     

  4. Zonda Newsfeed: November Update

    Let’s talk about how the proposed tax reform plans may impact homeownership. Bear in mind this analysis just skims the surface of the legislation. The initial drafts from both the House and Senate intend on doubling the standard deduction, which means individuals will now automatically get $12,000 and married couples will get $24,000. The bump in the standard deduction largely makes the popular mortgage interest deduction irrelevant, as the incentive to itemize taxes is lowered. There are also plans to either limit or remove the ability to deduct state and local taxes. We shouldn’t discount the fact that doubling the standard deduction does put more money back in the hands of consumers, but it does hurt one of the main selling points of homeownership.

    – Ali Wolf, Manager of Housing Economics at Meyers Research

    Homeownership Rates Slightly Increase

    Homeownership rate rose from 63.7% to 63.9% in the third quarter. The Midwest outpaced the national average at 69.1%, while the West lagged at 58.9%; historically, the West has had a lower rate than the rest of the country due to affordability constraints. Keeping with the positive momentum we’ve been telling you about Millennials, the homeownership rate for those under 35 grew for the third consecutive quarter to 35.6%.

    Homeownership Rates Increase November 2017

    Home Prices At All-Time High

    The Case-Shiller Home Price Index for August increased 6.0% YOY. This marks 64 straight months of year-over-year growth. The Case-Shiller 20-City Composite Index increased by 5.9% over the same period. The continued growth indicates solid expansion for the housing market. However, home price appreciation is outpacing both inflation and wages, which stretches affordability.

    Case-Shiller Home Price Index November 2017

     

    Mortgage Rates Still At Historical Lows

    The average 30-year fixed mortgage rate flattened to 3.94%. The rate was 3.65% last year. The Fed raised short-term interest rates twice this year and are planning a third for next month. Many experts believed those hikes would drive up mortgage rates, but the lower bond yield is keeping rates suppressed. Mortgage rates are still below 4.0%, which is favorable for housing demand.

    30-Year Fixed Rate Mortgage November 2017

     

    Ali Wolf, Manager of Housing Economics
    EMAIL ALI  |  ALI’S PROFILE 

    SEE ALL RECENT BLOG POSTS

Services Information Request

You’re on your way to meeting our team! We’ll be in touch soon to help push your business forward.
By clicking this button, you agree to our
Terms & Privacy Policy

Tech Services Sign Up

You’re on your way to meeting our team! We’ll be in touch soon to help push your business forward.
By clicking this button, you agree to our
Terms & Privacy Policy

Zonda Information Request

You’re on your way to meeting our team! We’ll be in touch soon to help push your business forward.
By clicking this button, you agree to our
Terms & Privacy Policy

Don't miss an update

Sign up for our newsletter to get timely housing market information, event and webinar updates, and product updates.
By clicking this button, you agree to our
Terms & Privacy Policy

Discover how Zonda can help grow your business

Complete the form below and a Zonda rep in your region will contact you with more information
By clicking this button, you agree to our
Terms & Privacy Policy

Learn More About Bird.i

We'll be in touch soon to help you push your business forward.
By clicking this button, you agree to our
Terms & Privacy Policy

Frame Information Request

We’ll be in touch soon to help push your business forward.
By clicking this button, you agree to our
Terms & Privacy Policy