Rearview Mirror (SCC & SMC)
October 2, 2020 — By its nature, economic data can only tell us what has already happened and can even suggest where we might be at the moment, but it cannot tell us where we’re going. Even significant previous events that routinely occur — recessions, for example — can be triggered by unique events, and so the response in each case (and any outcomes) will of course be different. Although there are some common reactions, such as the Federal Reserve lowering interest rates (or even buying bonds) it’s by no means clear that whatever bromide is used will have the intended effect.
One report that looks backwards but may actually suggest the future is the National Association of Realtors Pending Home Sales Index. A tally taken when sales contracts are signed, the PHSI rose to its highest level ever (19-year series) in August, climbing 8.8% over July’s value. Actual sales of existing homes are totaled up when the deed changes hands, which can take up to 60 days or so, so this would suggest that existing home sales reports for September and October will show improvement over the current (August) figure of 6 million annual sales, which was a 14-year high. How much above the current level is hard to reckon, since not all contracts make it through the process, and ever-thinning inventories of homes available to buy at increasingly higher prices seems likely to start to temper sales as we move deeper into the fourth quarter.
Construction spending kicked higher in August, driven there by a continuing surge in spending for home construction. The report showed an overall 1.4% increase in outlays for projects of all kinds, but those for housing spiked 3.7% higher (and that on the heels of twin 2.6% gains in June and July). Homebuilding has been on a tear, but that’s not the case for non-residential projects, which sported a decline of 0.3% during the month and has seen an increase in just two of the last eight months. Public-works spending edged just 0.1% higher for the month and has been soft for the last three, but since this is an election year we’ll see a slight boost when the September and October reports come out.
With Fed policy on hold, fiscal policy at bay for the moment (and perhaps longer, given the short time until the elections) and an economy that is running about as fast at it can given the situation, mortgage rates really don’t have reason to move much in either direction at the present time. With that as a backdrop, applications for mortgages are essentially backing and filling, and have largely been doing so for weeks or even months. In the week ending September 25, it was backing again, with the Mortgage Bankers Association reporting a 4.8% decline in new applications for mortgage credit. Requests for purchase-money mortgages eased 1.8%, but those for refinancing dropped by 6.5%, erasing a bit of the previous week’s jump.
As mortgage rates are essentially flat, there’s not much impetus for homeowners to rush into a refinance, and home purchases depend on having something to buy as well as favorable rates, which should remain, so there’s no pressure there, either. That will again be the case next week, where we think it’ll be more of the same, with the average offered rate for a conforming 30-year fixed rate mortgage wobbling a couple of basis points at best when Freddie Mac reports next Thursday morning — most likely upward.
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For further details and a city-by-city breakdown statistics, go to https://avi.rereport.com/market_reports.
For a focused review of current and historical market trends go to https://avi.rereport.com/market_reports and click “change’’ see below
Real estate related Articles
October 2, 2020
|Beautiful, perk-filled and mostly empty: What the future holds for tech’s billion-dollar headquarters |
By Fannie Mae
September 23, 2020
By Chip Cutter
August 28, 2020
|Fannie Mae Announces Suspension of Foreclosures and Evictions on Single-Family Mortgages Through Year-End|
By Fannie Mae
August 27, 2020
|More Homes in U.S. Fall Into Vacant Zombie Foreclosure Realm in Third Quarter of 2020 |
By ATTOM stuff
California homeowners interested in building accessory dwelling units on their property just caught a break, potentially shaving off thousands of dollars in fees and permits.
In a move proponents say will help ease the Bay Area’s housing crisis, Gov. Jerry Brown on Tuesday signed Senate Bill 1069, making the so-called “granny units” easier and less expensive to build throughout the state.
Helpful resource for home owners
Many new home owners or owners who consider remodeling or rebuilding their homes should take advantage of their county Tax Assessor web site. These web site and their respective city building departments web site typically have vest information regarding the process for applying for permits, the impact on their taxes and many other resources that home owners should be aware are available for them.
For the San Mateo County Tax Assessor office visit https://www.smcare.org/default.asp
For Santa Clara County Tax Assessor visit https://www.sccassessor.org/index.php
The Silicon Valley 150 Index Corner
The Silicon Valley’s Real estate market is a derivative of the local economy–it prospers and withers depending on how well the local innovation-based sector performs. The San Jose Mercury News tracks the performances of the largest 150 publicly traded companies headquartered in Silicon Valley through an index called the SV150, which may be found at www.mercurynews.com. Stocks are valued based on several criteria, but one of the more important criteria is a company’s future earnings. Therefore, I see the SV150 as a leading indicator for Silicon Valley’s real estate market.
S&P CORELOGIC CASE-SHILLER INDEX REPORTS 4.8% ANNUAL HOME PRICE GAIN IN JULY
NEW YORK, SEPTEMBER 29, 2020 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for July 2020 show that home prices continue to increase at a modest rate across the U.S. More than 27 years of history are available for these data series, and can be accessed in full by going to click here