Econintersect: In the past week both CoreLogic and Altos Research (analysis here) reported on home prices. Altos Research’s data through the end of July is already seeing the beginning of the seasonal drop in home prices. What are sellers doing now? Dropping their ask prices according to Altos Research:
The Price of New Listings-to-Ask Price ratio measures the price difference with each week’s new sellers entering the market relative to the current market ask price. Percent Price Decreased measures the number of active sellers that have taken at least one price reduction in the last 90 days. Both indicators are moving strongly negative since June.
What does this mean? Lower transaction prices in August and into the Fall. Recently reported gains in national home price indices like the S&P/Case-Shiller will move lower when they report September and October numbers.
CoreLogic reported that their home price index for June 2011 increased by 0.7% over May 2011 – the third increase in a row. CoreLogic however stated that home prices where lower year-over-year, and pointed out that the declines were more concentrated in the distressed sales market.
Mortgage applications increased 21.7% according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 5, 2011.
“Amid substantial market turmoil last week, mortgage rates dropped to their lowest levels of the year, and refinance applications jumped more than 30 percent to their highest levels of the year,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Over the past month, refinance application volume has increased by 63 percent. Refinance applications for jumbo loans increased by almost 75 percent relative to last week. Despite these low mortgage rates, applications for home purchase have remained little changed through the summer.”
The refinance share of mortgage activity increased to 75.6% of total applications from 70.1% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.37% from 4.45 percent, with points increasing to 1.07 from 0.78 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. Hat tap to Calculated Risk for the graphic.