Home Sales Increase in March, Rates Continue to Rise

Originally posted on www.cffunding.com/index.php/news/ on April 22, 2014

In a recent post on the Insights blog, Corelogic Senior Economist Molly Boesel shared that home prices have increased by 10 percent year-over-year as of March 2014. CF Funding is glad to see positive equity return to homeowners as home prices rise. The sales pace is now 5.17 million, which is 31.5 percent higher than February’s pace of 3.93 million. This is to be expected as home sales rise in the Spring as weather improves. In comparison to previous years, however, the jump was high, as the average increase from February to March is 27 percent.

As CF Funding shared last week on their website, single-family home starts grew in February, and the Insights Blog confirms this trend as “improvement in March home sales were led by newly constructed homes which increased by 24 percent, followed by re-sales which increased by 19 percent.” Improvements in the amount of distressed sales were also evident, as last year’s 20.4 percent is now reduced to 13.7 percent. REO sales and short sales were also down, with short sales accounting for only 3.8 percent of total sales in March. According to Boesel, “REOs typically sell at a larger discount compared to healthy sales than do short sales… the more recent shift away from REO sales is a driver of improving home prices.” She emphasizes that distressed sales will never reach a level of 0, but ideally could return to pre-crisis lows of about 2 percent.

The state with the largest amount of distressed sales was Michigan, at 29.7 percent. Illinois was second with 25.9 percent, followed by Nevada, Florida, and Georgia. CF Funding is happy to share that California saw a large decrease in distressed sales in March, with a 17.4 percent drop. Unfortunately CF Funding’s hometown of Chicago-Naperville-Arlington Heights was reported with the highest amount of distressed sales in March of 25 Core Based Statistical Areas (based on population).

In other mortgage news today, mortgage rates continue to rise, as Mortgage News Daily reported that “rates pushed into their 2-week highs yesterday, but are still well under the levels seen in the first week of April.” The most frequently quoted rate for a 30 year fixed mortgage was about 4.5 percent, making today’s rates about .02 percent higher. These rates can be compared to 2014’s lows of about 4.25 percent and highs of about 4.625 percent.

For more information about home price and interest rates, follow CF Funding Corporation on Facebook at www.facebook.com/cffundingcorp or contact a loan specialist today at (888)344-4080.