Mortgage News for the Week of November 30, 2018
The Latest Philadelphia Region Market Conditions Report
Total units sold rises 3% from September, inventory drops 19% year-over-year.

October Highlights:
  • This October, the median sale price was $227,050, an increase of 3% compared to last year.
  • The current median sale price was 3% lower than in September.
  • There was an increase of 3% in total units sold in October compared to September.
  • This month's total units sold was lower than at this time last year, a decrease of 2% versus October 2017.
  • October's total active inventory of 19,997 units was 4% lower than the previous month's supply of inventory.
  • Versus last October, the total number of homes available was lower by 4,756 units or 19%.
  • Total volume sold this October was 2% greater than the same month one year ago.
  • In October, there was 3.5 months of supply available, compared to 4.3 in October 2017. That was a decrease of 17% versus a year ago.
  • Based on this month's amount of new listings and new contracts, the ratio of home supply (new listings) to current home demand (new contracts) was 1.4, similar to the ratio from one year ago.
NAR's 2019 Housing Forecast

Rising mortgage rates and home prices may prove a bigger thorn to home buyers in 2019 as buying a home gets more expensive in the new year. Meanwhile, as more homeowners list their homes, sellers will face greater competition, possibly increasing the need for concessions.

Mortgage rates are forecast to reach 5.5 percent by the end of the year, and monthly mortgage payments will increase 8 percent. That could put homeownership more out of reach to first-time home buyers, realtor.comĀ® researchers predict.

"Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don't expect a buyer's market on the horizon within the next five years," says Danielle Hale, realtor.comĀ®'s chief economist. "Unfortunately for buyers, it's only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they'll adapt to higher rates and prices."  Read More from the National Association of Realtors.

Mortgage Applications: Volumes Ignore Holiday With 5.5% Increase

Even though the week was shortened by the Thanksgiving holiday MBA's Market Composite Index, a measure of mortgage application volume, managed a 5.5 percentincrease on a seasonally adjusted basis.  While the index was adjusted to account for the holiday, it was the largest increase since the week ended January 8, a period which followed a protracted holiday period. On an unadjusted basis the index dropped by 29 percent. 

The increase was driven by a large gain in the seasonally adjusted Purchase Index which rose 9 percent. The unadjusted index was down by 28 percent but was 2 percent higher than the same week in 2017, also a holiday shortened week.  The Refinancing Index was up 1.0 percent and the refinance share of mortgage activity decreased to 37.9 percent of total applications from 38.5 percent the previous week.  Read more at Mortgage News Daily.
Pending Home Sales Snapshot

In October 2018, pending home sales were down -6.7 percent year-over-year nationally, 2.9% in Northeast.

Home Prices Still Increasing - Just a Little Slower

The views about the direction of home prices diverged slightly in September, as those reported in the S&P CoreLogic Case Shiller indices slowed for the second month in a row while those from the Federal Housing Finance Agency (FHFA) for both September and the third quarter mostly kept chugging along.

The Case-Shiller National Home Price index which covers all nine U.S. census divisions slowed from a 5.7 percent increase in August to 5.5 percent.  On a non-seasonally adjusted basis the index gained 0.1 percent and was up 0.4 percent after adjustment.  The monthly appreciation in August was reported at 0.2 percent unadjusted and 0.6 percent afterward.  Read more at Mortgage News Daily.
Apartments Are Getting Smaller - But Renters Are Paying More

Apartments are getting smaller in much of the U.S., even as rents are rising.

The average size of newly built apartments in 2018 is 941 square feet, which is 5 percent smaller than it was a decade ago. For studio apartments, the change is more pronounced - they're 10 percent smaller. Rents, on the other hand, have jumped 28 percent during the same time period, according to RENTCafe, a nationwide apartment search website.

"Changes in renters' living habits are literally redrawing floor plans," wrote Nadia Balint, senior marketing writer for RENTCafe. "The largest share of apartment dwellers, millennials, prefer living in locations close to restaurants and entertainment, rather than having a large kitchen or living room to cook or entertain at home."  Read more from CNBC.
Mortgage Rate Update
Mortgage Rates Barely Move

house and graph
Mortgage rates stabilized the last couple of months as interest rate sensitive sectors such as new auto and home sales softened the outlook for the economy. Homebuyers pounced on the stability in rates as purchase mortgage applications increased, which indicates that despite higher mortgage rates this year there are buyers on the fence waiting for the right time to buy.

We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us.

Be sure to follow us on  Twitter  and  Google + and Like Us on  Facebook!

610.834.8700 (Main Office - Plymouth Meeting)
215.345.7600 (Doylestown Office)
609.398.8600 (Ocean City, NJ Office)

Information and analysis is obtained through third parties and is deemed accurate but not guaranteed.  Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570.

Recent Economic Data

PMA & PHFA/NJHMFA can make it easier for first-time buyers to purchase a home!

0 Down VA Loans
are Easier with PMA's 
In-House Approvals!