Latest news with #MortgageNewsDaily
CNBC
2 days ago
- Business
- CNBC
June home sales drop as prices hit a record high
Sales of previously owned homes in June dropped 2.7% from May to 3.93 million units on a seasonally-adjusted, annualized basis, according to the National Association of Realtors. Analysts had expected a drop of just 0.7%. Sales were unchanged from June 2024. This report is based on closings, so contracts that were likely signed in April and May, when the average rate on the 30-year fixed mortgage jumped above 7% a few times and never went below 6.8%, according to Mortgage News Daily. "High mortgage rates are causing home sales to remain stuck at cyclical lows," said Lawrence Yun, chief economist for the NAR, in a release. "If the average mortgage rates were to decline to 6%, our scenario analysis suggests an additional 160,000 renters becoming first-time homeowners and elevated sales activity from existing homeowners." Mortgage rates have not moved markedly in the last several months, remaining stubbornly high amid concerns over the broader economy. The average rate now is 6.77%. CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Supply continues to gain, with 1.53 million units for sale at the end of June. That is an increase of 15.9% year over year and represents a 4.7-month supply at the current sales pace. A 6-month supply is considered balanced between buyer and seller, so the market is still lean. The median price of a home sold in June was $435,300, up 2% year over year and another record high for the month of June. That is the 24th consecutive month of annual increases. "Multiple years of undersupply are driving the record high home price. Home construction continues to lag population growth. This is holding back first-time home buyers from entering the market," said Yun, noting also that the average homeowner's wealth increased by $140,900 over the past five years. Sales continue to outperform on the higher end of the market. Homes priced below $100,000 dropped 5% annually. Homes priced between $100,000 and $250,000 rose 5%. And homes priced above $1 million jumped 14%. Houses are spending longer on the market, at an average of 27 days compared with 22 days last June. Higher-end homes are selling faster than those priced below $500,000. First-time buyers represented 30% of sales. Historically that demographic makes up 40% of all buyers. The share of all-cash deals remained elevated at 29% of sales. Pre-Covid, cash sales accounted for roughly 20% of the market. Homes listed received an average of 2.4 offers, down slightly from 2.5 last month and from 2.9 a year earlier.
CNBC
2 days ago
- Business
- CNBC
Mortgage demand flatlines at low levels, as mortgage rates hit 4-week high
Mortgage rates rose last week to the highest level in four weeks, but mortgage demand didn't really move. Total mortgage application volume increased 0.8% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.84% from 6.82%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment. Applications to refinance a home loan, which are most sensitive to weekly rate moves, fell 3% for the week and were 22% higher than the same week one year ago, when interest rates were just 2 basis points lower. While the annual jump may seem large, that's only because the volume is so very small. Applications for a mortgage to purchase a home rose 3% for the week and were also 22% higher than the same week one year ago. "After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700," said Joel Kan, an MBA economist. "With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week." CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. Mortgage rates moved slightly lower to start this week, according to a separate survey from Mortgage News Daily. Markets reacted positively Tuesday morning to details from Treasury Secretary Scott Bessent's thoughts on whether or not Federal Reserve Chairman Jerome Powell would leave office early. Last week, bond yields rose on concerns he might. "In not so many words, Bessent told Trump not to fire Powell and this morning's [Tuesday's] coverage just expanded on that sentiment," wrote Matthew Graham, chief operating officer of Mortgage News Daily. "The Bessent news helped the bond market begin the day in stronger territory."
NBC News
25-06-2025
- Business
- NBC News
Sales of new homes tanked in May, pushing supply up to a 3-year high
Sales of new single-family homes dropped 13.7% in May compared with April to 623,000 units on a seasonally adjusted, annualized basis, according to the U.S. Census. That sales total was 6.3% lower than May 2024 and well below both the six-month average of 671,000 and the one-year average of 676,000. It also lags the pre-pandemic average in 2019 of 685,000 units sold. Wall Street analysts were expecting May new home sales of 695,000, according to estimates from Dow Jones. This count is based on signed contracts, so people out shopping in May, when mortgage rates remained stubbornly high. The average rate on the 30-year fixed mortgage started May at 6.83%, rose steadily to just over 7% and then settled back at 6.95% by the end of the month, according to Mortgage News Daily. 'The large fall in new home sales in May cancels out all of the positivity of the past couple of months and serves as a valuable reminder that buyer activity can only rise so far with mortgage rates hugging 7%,' wrote Bradley Saunders, an economist at Capital Economics. Homebuilders who reported quarterly earnings recently noted high rates cutting into affordability. 'The macro economy remains challenging, as mortgage interest rates have remained higher while consumer confidence has been challenged by a wide range of uncertainties, both domestic and global,' said Stuart Miller, co-CEO of Lennar, on a call with analysts following the company's fiscal second-quarter earnings release. 'Across the housing landscape, actionable demand has been diminished by both affordability and consumer confidence, and therefore has continued to soften.' Lennar reported lowering prices, but KB Home, which posted its quarterly earnings this week, raised prices. Nationally, the median price of a new home sold in May was $426,600, according to the Census report, 3% above the year-earlier price. Slower sales resulted in a significant bump higher in supply. There were 507,000 new homes for sales at the end of May. This represents a 9.8-month supply at the current sales rate, which is 15% higher than May 2024. The last time supply was that high was briefly in the summer of 2022, after the Federal Reserve first started raising interest rates post-pandemic. Before that, supply hadn't been this high since 2009, amid the subprime mortgage crisis and the Great Recession.
CNBC
25-06-2025
- Business
- CNBC
Sales of new homes tanked in May, pushing supply up to a 3-year high
Sales of new single-family homes dropped 13.7% in May compared with April to 623,000 units on a seasonally-adjusted, annualized basis, according to the U.S. Census. That sales total was 6.3% lower than May 2024 and well below both the 6-month average of 671,000 and the one-year average of 676,000. It also lags the pre-pandemic average in 2019 of 685,000 units sold. Wall Street analysts were expecting May new home sales of 695,000, according to estimates from Dow Jones. This count is based on signed contracts, so people out shopping in May, when mortgage rates remained stubbornly high. The average rate on the 30-year fixed mortgage started May at 6.83%, rose steadily to just over 7% and then settled back at 6.95% by the end of the month, according to Mortgage News Daily. "The large fall in new home sales in May cancels out all of the positivity of the past couple of months and serves as a valuable reminder that buyer activity can only rise so far with mortgage rates hugging 7%," wrote Bradley Saunders, an economist with Capital Economics. Home builders who reported quarterly earnings recently noted high rates cutting into affordability. "The macro economy remains challenging, as mortgage interest rates have remained higher while consumer confidence has been challenged by a wide range of uncertainties, both domestic and global," said Stuart Miller, co-CEO of Lennar, on a call with analysts following the company's second-quarter earnings release. "Across the housing landscape, actionable demand has been diminished by both affordability and consumer confidence, and therefore has continued to soften." Lennar reported lowering prices, but KB Home, which reported its quarterly earnings this week, raised prices. Nationally, the median price of a new home sold in May was $426,600, according to the Census report, 3% above the year-earlier price. Slower sales resulted in a significant bump higher in supply. There were 507,000 new homes for sales at the end of May. This represents a 9.8-month supply at the current sales rate, which is 15% higher than May 2024. The last time supply was that high was briefly in the summer of 2022, after the Federal Reserve first started raising interest rates post-pandemic. Before that, supply hadn't been this high since 2009, amid the subprime mortgage crisis and the great recession.
CNET
26-05-2025
- Business
- CNET
Mortgage Rate Predictions for the Week of May 26- June 1, 2025
Mortgage rates can change daily and even hourly. Tharon Green/CNET Recently, I've been outlining how average mortgage rates are likely to remain above 6.5% for a while. Uncertainty over the impact of President Trump's economic policies has been causing daily volatility in the mortgage market. Last week, the average rate on a 30-year fixed mortgage climbed as high as 7.08%, according to data from Mortgage News Daily. Rates started the month around 6.75%. The big jump was due to rising Treasury yields in the bond market. The 30-year mortgage rate closely tracks the 10-year Treasury yield; when yields go up, lenders respond by setting higher rates for home loans. 'Treasury yields have been moving higher as a result of increasing headwinds in the economy, rising federal government debt levels and the recent downgrading of the US's credit rating by Moody's,' said Lisa Sturtevant, chief economist at Bright MLS. US Treasury bonds have traditionally been considered a safe haven during economic uncertainty, Sturtevant noted. However, investors have recently been pulling back from them due to perceived risk, causing bond prices to fall and yields to go up. Sturtevant said mortgage rates will likely remain near 7% or slightly higher in the near term. High mortgage rates and record-low affordability have plagued the housing market since 2022. But even those who can afford to buy in today's market are waiting. 'Growing uncertainty is going to make this a slower-than-typical spring housing market,' said Sturtevant. It's not only about the financial calculus but also the psychological impact of economic instability that holds prospective buyers back. 'When people are anxious, they are less likely to make big decisions, like buying and selling a home,' said Sturtevant. How tariffs are affecting mortgage rates Bond yields had already been on the rise even before last week, fueled by a combination of risk factors, including the impact of tariffs. Specifically, analysts expect domestic companies to pass expensive tariffs onto consumers in the form of higher retail prices, which would kick inflation back up. With the details of Trump's budget bill still being debated and tariffs negotiations are ongoing, we're likely to see more economic volatility over the coming weeks and months. Overall, prospective homebuyers should expect mortgage rates to remain elevated, with any dips likely to be small and temporary. 'It's a roller coaster that seems to be trending higher versus lower,' said Melissa Cohn, regional vice president at William Raveis Mortgage. 'Financial markets hate uncertainty. If it's not the budget, it's the tariffs.' Can mortgage rates still fall in 2025? While longer-term housing market forecasts call for a gradual decline in borrowing costs over the coming years, the potential for sub-6% mortgage rates in 2025 is slim. Financial experts caution that higher inflation due to Trump's tariffs could derail the Federal Reserve's anticipated rate cuts. Though the central bank doesn't directly set the rates on home loans, its monetary policy changes have a ripple effect on the housing market. Fed officials cut interest rates three times in 2024 because of slowing inflation, making borrowing costs slightly less restrictive. However, the Fed has been in a holding pattern since then, waiting to see the long-term implications of Trump's policies before it cuts rates again. Earlier in the year, market watchers expected as many as four or five rate cuts by the Fed in 2025. Now, the prospect of even one or two rate cuts is diminishing. 'The Fed's not going to do anything because now they have to continue to wait because of additional prolonged uncertainty,' said Cohn. Given where inflation and the economy are right now, markets are no longer predicting a rate cut this summer. 'However, the situation could change quickly if there are new announcements out of the Trump administration or if global economic conditions weaken,' said Sturtevant. In other words, unless there's a fresh downshift in the inflation trend or a sudden weakening of labor conditions, which would prompt the Fed to ease policy, mortgage rates will remain close to 7% for a while. Tips for navigating an uncertain housing market Mortgage rates haven't moved steadily in one direction over the last few months, and that shakiness is likely to continue, according to Hannah Jones, senior research analyst at If you're waiting for mortgage rates to come down before buying, keep in mind that the large-scale economic issues affecting the housing market are beyond your control. However, there are ways to bring down your individual mortgage rate. "With borrowing costs elevated, buyers can take steps to reduce their housing expenses by securing a lower mortgage rate," said Jones. For example, being financially prepared and shopping around for lenders can save borrowers up to 1.5% on their mortgage rate. Since each lender offers different rates and terms, comparing offers from multiple lenders can also help you negotiate a better rate. If you can't snag a low rate but are ready to buy, you can always refinance down the road. Jones said other strategies for lowering your mortgage rate include improving your credit score, making a larger down payment or choosing a more affordable home. When weighing the pros and cons of homeownership, experts recommend making a homebuying budget and sticking to it. Creating a realistic financial plan can help you decide if you can handle the costs of homeownership and provide you with some figures for how large your mortgage should be. Watch this: 6 Ways to Reduce Your Mortgage Interest Rate by 1% or More 02:31 More on today's housing market
