Amid concerns about inventory and buyer demand, the housing market received positive reports from two separate sources during the week of July 21, offering promise that a corner has fully been turned.
The National Association of Realtors reported that existing home sales increased by 2.6 percent during June, hitting an eight-month high. The annualized rate of sales for existing homes is now at 5.04 million, while the national median home price hit its highest point since 2007, at $233,300. Meanwhile, a separate report from the Mortgage Bankers Association revealed that the volume of new home loan applications was up 3 percent through July 18 - an indication that demand may be picking up as summer hits its second half.
Mortgage applications volumes have been among the most inconsistent metrics of late, with HousingWire noting that the recent spike comes less than a month after a week-over-week drop in originations of more than 9 percent. Still, the convergence of an uptick in existing home sales and more prospective buyers applying for mortgages can't be overlooked, especially when so much has been made of the need for sustainable demand.
The MBA's refinance index was up 4 percent and the unadjusted purchase index was up 1 percent on week-over-week basis, though the latter gauge remained 16 percent below where it sat during the same week in 2013. Some of the renewed demand can be attributed to mortgage interest rates, which have remained flat and relatively low by historical standards. Affordability, in general, has improved, despite the fact that the median price is up nationally. In many of the metro areas where inventory concerns persist, appreciation rates have eased, offering many consumers better odds.
Picking up the pace
According to the NAR, housing market expansion exceeded a 3 percent annualized rate for the second quarter and is expected to further accelerate through the end of the year. As a Reuters report noted, labor market stability, along with the affordability factors and improving inventory levels, could be setting the table for a second-half housing resurgence that buoys the economy as a whole.
"We may see a late season summer push in housing activity," Nela Richardson, chief economist for Redfin, told Reuters. "Inventory is picking up and mortgage rates are hovering around lows for the year, which make things a bit easier for first-time buyers." Offering yet another glimmer of optimism, homebuilding stocks were up following the NAR and MBA reports' releases, with the Dow Jones construction index rising 1.5 percent.