Latest / Mastering Encompass® / Median Prices at Record Highs! Market Update 6/24/24

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Median Prices at Record Highs! Market Update 6/24/24 · Mastering Encompass®

• 0:28
  Hi everyone, Larry Bailey here bringing you another weekly newsletter update.
• 0:33
  This information is brought to you from MBS Highway and if you're not getting this information directly you probably should head over to mbshighway.com for your own subscription. And if you are looking for a best way to manage your commissions and your bonuses and your payroll, to have unlimited commission plans or bonus plans, all kinds of calculated ways to make sure that the money that your team is owed is shown to them and they can approve it and then you can make sure that when it comes time to run your payroll, you know exactly what's happening including documenting things like draws to make sure you don't overpay accidentally, of course. Check out all of this information at AwesomeTechInc.com.
• 1:15
  Let's get into this weekly newsletter read-through. This is the newsletter for June 24th, 2024. We are going to go through the week of June 17th in review.
• 1:25
  So both sales of existing homes and new construction were lower in June.
• 1:29
  In May, here are the highlights and the stories that we are going to go through. Existing home sales slower, but median home price at record high.
• 1:38
  Home builder sentiment hammered lower. Housing starts permits lower than expected. Flat retail sales start of a slowdown.
• 1:47
  And watching trends in jobless cases.
• 1:51
  If you're listening to this on podcast, thank you very much. I really do appreciate all the replays.
• 1:57
  I want you to get over to watch the actual full video over at mortgage.community. You can check it out in the mortgage market updates.
• 2:03
  And also that's where you'll find all the recipes shown on screen for the family hack of mortgage.
• 2:10
  through later on in today's episode.
• 2:14
  So the first story is existing home sales slower, but medium home price at record high.
• 2:20
  There's a nice image on here that gives you a image of a month over month over month. from the National Association of Realtors and what the story shows is that the sales of existing homes fell 0.7% in May to a 4.1 million unit annualized pace per the National Association of Realtors, also known as NAR compared to the 1.4% decline. The market was expecting.
• 2:48
  This report measures closings on existing homes in May and likely reflects people shopping for homes in March and April. The median home price reached a record high of $419,300, which was up 3% month over month and 5% year over year.
• 3:05
  So, what we've been seeing here is while the pace of sales declined again in May, the speed at which homes sold continued to accelerate.
• 3:13
  So, in other words, the time to go from contract to closing.
• 3:16
  Homes remained on the market for a shorter period in May, with a 24-day average down from 26 days in April.
• 3:22
  Uh, plus 30% of homes sold at above list price, which rose to $24,000. So, both of these factors together show that demand and competition remain during the spring buying season, even in the face of elevated rates.
• 3:38
  Inventory also saw a boost, as the 1.28 million homes available for sale at the end of May were up 6.7% from April.
• 3:46
  And 18.5% from a year ago, in 2023. While this remains below healthy levels at just 3.7 months supply, at the current sales pace, rising inventory is certainly a step in the right direction to help improve ongoing supply constraints.
• 4:03
  So there you go. Homebuilder sentiment hammered lower is the next story, and you see a nice image on here where it gives you all of the homebuilder sentiments from January, and it gives you this little chart that kind of looks like a rolling hill up and down. And here's the story.
• 4:21
  So confidence among homebuilders from below the key breakeven threshold of 50 per the National Association of Homebuilders, also known as NEHB, as their housing market index dropped two points to 43 in June. Remember, any score over 50 on this index, which runs from 100 to zero, signals that more builders view conditions as good than poor.
• 4:45
  Among the three index components, current and future sales expectations, both entered contraction territory.
• 4:53
  This gauge judges buyer traffic.
• 4:57
  It also declined, remaining in contraction territory.
• 5:01
  Bottom line here, gang, is NEHB Chair, uh, Cheryl Harris, explained, quote, persistently high mortgage rates are keeping many prospective buyers on the sidelines. Homebuilders are also dealing with higher rates for construction and development loans, chronic labor shortages, and a death, and a dearth, of buildable lots.
• 5:23
  So, um, you're, you're, uh, going to go through a, um, a couple of pieces of information if you do some background research on the NEHB, and, uh, one of the other things that's happening here is the cost of lumber.
• 5:39
  is actually falling, um, I saw this story, this is my own personal commentary here, but I saw this story of, of lumber actually falling to pre-pandemic levels, and it's because builders aren't grabbing the, the supplies. right, and so demand is down, that means prices come down, that's straight-up economics 101, um, so we'll see where this goes, uh, but the one thing that caught my eye in that story was labor shortages, um, yeah, uh, manual labor is hard, not a lot of people want to do it, and uh, I know contractors constantly have a problem, um, you know, finding adequate labor to get projects completed. Here's the next story, housing starts and permits lower than expected, so we see some month-over-month and year-over-year figures, uh, from the U.S.
• 6:33
  Census Bureau and HUD. The housing, here's the story, housing starts fell 5.5% from April to May, coming in well below what economists had forecasted.
• 6:43
  Starts for single-family homes, which make up the bulk of home building, are the most crucial, uh, part of buyer demand. They were also a 5.2% decline.
• 6:53
  There was a similar trend in the in in future construction, with building permits moving lower, despite much needed supply.
• 7:02
  Bottom line here with this one is, softer than expected construction activity this spring could limit much needed supply down the road.
• 7:09
  This bodes well for appreciation for those homes that are already built, and shows that opportunities remain to build well through with my.
• 7:16
  Yeah, so we get into the next story here.
• 7:21
  Flat retail sales start of a slowdown. So there are signs that consumers are slowing their spending as retail sales were only 0.1% higher from April to May.
• 7:30
  Sales in April will also revise the downward from the original reported flat reading to a. All right. We're going up. Good. That's a 0.2% loss when compared to March. Bottom line here is the part the pause and spending last month was a miss on estimates as forecasters had predicted a 0.1% gain. The Fed will be closely watching future retail sales.
• 7:52
  The US is actually really important on the world market.
• 7:55
  So the US just buys everything from everyone. Right? And so if the US spending is lower, it's not just affecting the US, it's actually affecting other countries which is actually is an interesting macro world level economic lesson if you want to watch this thing play out in real life. I'm not an econ guy myself but I know lots of people that are and it is a shining example of how just how well we are all connected around the world. With supply chains and retail sectors.
• 8:36
  So I'm watching this very closely.
• 8:39
  Another thing and I talked about this on a post this morning on LinkedIn to some guys that we kind of go back and forth publicly.
• 8:47
  But I'm still watching these subscription services increase their services. Umm, without really any reason besides trying to make money on their platforms. In other words the cost of the internet hasn't changed but you can see it I'm sure in your own personal finances that all of these subscriptions that we've had and that were umm really tied to like we can't get rid of them prices just keep riding and umm and I know that with some recent streaming services they're doing like one or two dollars or three dollars per month sometimes five dollars per month and when you do this at as a percentage wise it's far outpacing any inflation which is interesting because if more people do this it actually will artificially increase inflation so it's it's uh it's an interesting thing to watch I think we're probably as a as a as a country we're oversaturated with subscriptions I'm interested to see what happens in the marketplace as uh people and public generally speaking can no longer afford all these subscriptions and to see what happens with that um anyway back to back to our uh market update I feel like I'm on a tangent here today so I appreciate you hanging in with me here's the next story for watching trends and jobless claims initial jobless claims fell by f***ing 5,000 and the latest week is 238,000 people fall for unemployment benefits for the first time continuing claims rose 15,000 with now 1.83 million people still receiving benefits after filing their initial claim.
• 10:22
  Bottom line here is that while the initial jobless claims fell last week they remain at elevated levels with the- latest reading the highest number of first time fileers in 10 months.
• 10:34
  Continuing claims are also still trending near some of the hottest levels we've seen in recent years, suggesting that the pace of hiring has slowed.
• 10:42
  The Fed will be closely watching for any rising trends in unemployment claims as they weigh their monetary policy. Ow! And the timing for rate cuts given their dual mandate for price stability and maximum employment.
• 10:57
  Here's that family hack of the weeks. I remember you're only going to see this recipe over at mortgage.community.
• 11:03
  June 26th, which is Wednesday this week is National Chocolate Pudding Day and it has. . . .
• 11:09
  chocolate pudding in a while. I'm used to have it a lot, but not anymore. Don't know why.
• 11:15
  So check out this recipe. You can make it yourself, which sounds really cool and it's brought to you from the taste of home.
• 11:22
  Check it out over at mortgage.community. It's free to join the community.
• 11:25
  By the way, everybody should join and check out all the information that's there, including these replays on video.
• 11:31
  What's, what's the look ahead for this week?
• 11:33
  You've got more housing news starting on Tuesday with appreciation data from Kate Schiller and federal housing finance agency, also known as FHFA. May's new and pending home sales follows on Wednesday and.
• 11:46
  And Thursday, respectively. Also on Thursday, look for the final reading on the first quarter GDP and the latest jobless claims Friday brings a critical inflation update via the Fed's favored measure.
• 11:58
  You know it. We've talked about it. It's the PCE, the personal consumption expenditure. Again, economics. Have a great week! Alright gang, my name is Larry Bailey. Again, thank you very much for always checking this podcast out and this replay out for the market update.
• 12:15
  I appreciate we'll bring it to you every week and we'll see you next week. Take care.