Here is what was at the top of the headlines for the mortgage industry this past week:
1. Biggest Monthly Gain for Housing Starts Since 1990
Housing starts and housing completions for September, October and November were released by the U.S. Census Bureau and the Department of Housing and Urban Development today. The September and October numbers were not released on schedule in October and November because of the nearly month-long government shutdown. Information on permitting for the two months was released on a delayed basis on November 26.
Housing starts in September were at a seasonally adjusted annual rate of 873,000 compared to 883,000 in August. Starts in October were at a revised rate of 889,000 and November starts increased by a substantial 22.7 percent to a seasonally adjusted annual rate of 1,091,000. The November figure is a 29.6 percent jump from the estimate of 842,000 starts in November 2012, and the largest month-over-month increase since 1990!
2. Existing Home Sales Break 29 Month Streak of Year-Over-Year Gains
Existing home sales in November failed to outdo those in the same month a year earlier for the first time in 29 months. The National Association of Realtors® (NAR) said today that existing single-family homes, condominiums, townhomes, and cooperative apartments sold at a seasonally adjusted annual rate of 4.90 million units during the month, a 4.2 percent drop from October’s rate of 5.12 million and 1.2 percent below the November 2012 sales pace of 4.96 million.
Completed sales of single-family homes were down 3.8 percent to a seasonally adjusted annual rate of 4.32 million in November from 4.49 million in October, and were 0.9 percent below the 4.36 million-unit level in November 2012. Existing condominium and co-op sales dropped 7.9 percent to an annual rate of 580,000 units in November from 630,000 units in October, and were 3.3 percent lower than the 600,000-unit pace a year ago.
Despite declining sales, prices continued to rise, at least when viewed year-over-year. The national median price for all categories of housing was $196,300 in November, 9.4 percent higher than a year earlier. The median single-family home price was $196,200 and the median condo price was $197,400, reflecting annual increases of 9.4 percent and 10.0 percent respectively.
3. Mortgage Application Volume hits 12-year Low
It was another down week for mortgage application activity. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, fell 5.5 percent on a seasonally adjusted basis during the week ended December 13 and was down 6 percent on a non-adjusted basis compared to the week ended December 6.
“Mortgage applications fell further last week, with the market index falling to its lowest level in more than a dozen years,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Both purchase and refinance applications fell as interest rates increased going into today’s Federal Open Market Committee meeting.”
The MBA’s Refinance Index was down 4 percent from the previous week but refinancing’s share of all activity increased from 65 percent to 66 percent. The seasonally adjusted Purchase Index dropped 6 percent to its lowest level since December 2012. The unadjusted Purchase Index decreased 9 percent compared with the previous week and was 12 percent lower than the same week one year ago.