Corelogic predicts that home prices will appreciate by 5.3% across the country this upcoming year. This is the 49th consecutive month with year over year price gains. Corolla, NC, Outer Banks home sales and construction is up and pending homes sales have reached a new yearly high.
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Some Highlights:
Home prices rose in November, as the S&P/Case-Shiller U.S. National Home Price Index (HPI) increased
0.9 percent on the month. Nationally, home prices have risen 5.3 percent over the past year.
Western Cities Lead the Way
Supply & Demand Driving Prices
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Sales of existing homes jumped 14.7 percent in December compared to November, according to the National Association of Realtors, but not because the housing market is suddenly outperforming all expectations. The jump in December had all to do with the nearly 11 percent monthly drop in home sales in November, and that drop in November had all to do with something in the mortgage market called “TRID.”
TRID is an acronym for TILA-RESPA Integrated Disclosure. It’s a new set of rules from federal regulators, deemed “Know Before You Owe,” designed to protect borrowers from hidden fees and costs in a home loan. It requires lenders to present borrowers with a simple disclosure form listing all facets of the loan three business days prior to closing. This is so borrowers can ask educated questions if they need to.
“(Friday’s) data just confirms that the November drop was due to delays in closings that were pushed to December,” said Lawrence Yun, chief economist for the NAR.
TRID went into effect in October, and first began to delay closings in November. Even though lenders had over a year to prepare, shifting their computer systems and adapting to the new protocol did cause problems. These delays, in addition to November having the Thanksgiving holiday, pushed a fair amount of closings to December.
First-time homebuyers are finally jumping into the U.S. property market.
Originations of FHA-backed mortgages, used predominately by first-time buyers, were up 54 percent in September from a year earlier, according to the most recent data from CoreLogic Inc. By December, the FHA insured 22 percent of all loan originations, up from 17 percent a year earlier, according to data compiled by Ellie Mae Inc.
“The FHA will be a contributing factor to homeownership rising again in America,” said David Lykken, president and founder of Transformational Mortgage Solutions in Austin, Texas. “We’re seeing the return of first-time buyers.”
U.S. stocks closed sharply lower Wednesday, pressured by low oil prices, as concerns about global economic slowdown weighed ahead of major earnings reports.
The S&P 500 closed down 2.5 percent, ending below the psychologically key 1,900 level for the first time since Sept. 29. The index fell below that level in intraday trade for the first time since Oct. 2, 2015. Consumer discretionary was the greatest declining sector.
All three U.S. averages closed more than 10 percent below their 52-week intraday highs, in correction territory.
“It started with crude just weakening a little bit. Everyone’s so afraid of this earnings season they’re pre-selling it,” said JJ Kinahan, chief strategist at TD Ameritrade.
He noted selling accelerated as the S&P 500 gave up gains for the day and turned lower in late-morning trade. The VIX also climbed, holding near 25 in the close.
Chatter about stress in the hedge fund community contributed to the selling pressure while traders also noted a certain flight to safety.
Treasury yields fell, with the 10-year yield hitting its lowest since late October and the 2-year yield touching its lowest since mid-December.
