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
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