Real Estate Roundup 13 July 2011 - Is There a Loss Of Momentum to the Seasonal Surge?

July 13th, 2011
in econ_news

Econintersect: The week's summary focuses on Altos Research's July 2011 real time housing report which shows some flattening in the seasonal price surge, as well as information from the Mortgage Bankers Association (MBA).

Altos Research offers the earliest output of real estate pricing.

While the smoothed 90-day trends continue up, the weekly sample for June housing market showed a slight flattening of home prices. The biggest increases in prices were relatively small. The leaders were Detroit (2.78%), San Francisco (2.34%), and Washington DC (2.28%).

Follow up:

The inventory levels are flattening, indicating a loss of momentum. Roughly half of the composite markets reported increases in inventory and the other half reported decreases in inventory. The seasonal spike usually levels around this time of year, so the 7-day inventory numbers are the ones to watch in the upcoming weeks to see if this is a trend or a fluke.

The Mortgage Bankers Association's Weekly Mortgage Applications Survey for week ending 08July2011 shows applications decreased 5.1% from one week earlier.  This week's results include an adjustment to account for the Fourth of July holiday.

Please note that 30% of all real estate transaction do not involve mortgages - the the relevance of this data is suspect.

On an unadjusted basis, the Index decreased 24.0% compared with the previous week.   The Refinance Index decreased 6.2 percent from the previous week, and was 42.1 percent lower than a year ago.  The Refinance Index has decreased the past four consecutive weeks, reaching its lowest level since April 29, 2011.  Graphic hat tip to Calculated Risk which illustrates mortgage activity has remained in the same narrow band for the last year:

The refinance share of mortgage activity decreased to 65.6 percent of total applications from 66.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.5 percent from 6.1 percent of total applications from the previous week.  The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.55 percent from 4.69 percent, with points increasing to 0.99 from 0.90 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

source: MBA, Altos Research, Calculated Risk

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