Black Knight reports that despite home prices rising 97 months in row, affordability is the highest since 2016. For the same monthly payment, buyers can now afford almost $32,000 more home than they could a year ago.
The report notes that thanks to low mortgage rates, buying power is up 10% from a year ago. In that time, the average home price increased more than $12,000, yet the average monthly payment went down 6%!
CoreLogic’s CEO says, “we expect these price increases to moderate over the next 12 months” (nice for buyers), and that “given the economic outlook, housing remains a bright spot for the foreseeable future.”
REVIEW OF LAST WEEK
GOOD NEWS WINS…Congressional wrangling over the stimulus bill didn’t stop solid economic data and improved trends in U.S. coronavirus cases from boosting stocks, as the Nasdaq broke through 11,000 for a new record.
In July, the economy added 1.763 Nonfarm Payrolls (better than expected), the Unemployment Rate dropped to 10.2%, and Average Hourly Earnings rose 4.8% higher than a year ago.
Plus: ISM indexes for both manufacturing and services sectors reported strong expansion; a spate of corporate earnings reports handily beat estimates; and initial jobless claims fell to their lowest level since March. All good news.
The week ended with the Dow UP 3.8%, to 27,433; the S&P 500 UP 2.5%, to 3,351; and the Nasdaq UP 2.5%, to 11,011.
Treasuries retreated on the positive economic reports, but other bonds rose. The UMBS 3.0% went UP 0.20, to $106.00. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate hit another record low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… Ellie Mae’s COO says millennials are “the single biggest opportunity in the housing market today,” with over 4 million “reaching the age of 29 to 30 each year for the next several years…the average age when millennials enter the homebuying market.”
THIS WEEK’S FORECAST
CONSUMERS SPEND AT RETAIL AS PRICES STAY IN CHECK…Analysts expect Retail Sales to keep growing in July, while inflation remains moderate by the Consumer Price Index (CPI) and the wholesale Producer Price Index (PPI).
NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.