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November was a mixed month for the housing industry, according to the morning’s latest data reports, with rising home values but fewer pending home sales.
Zillow’s new Home Value Index report determined that home values in November rose 3.9 percent annually to $183,000. Denver enjoyed the tenth consecutive month as the metro area with the fastest growing home values—15.5 percent in November—while Dallas, Miami, Portland, San Francisco and San Jose also experienced double-digit growth. Zillow also found that rents grew 3.8 percent annually to $1,382 in November, San Francisco and Portland reporting double-digit rent growth.
Zillow also looked back on 2015 and concluded that the value of all homes nationwide grew $1.1 trillion, with the expectation that the year will end at a $28.5 trillion total. But while the value of the entire housing stock grew 4.1 percent over the past year, Zillow acknowledge that this year’s pace was slower than the six percent growth in 2014.
“Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been,” said Zillow Chief Economist Svenja Gudell. “At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year.”
Separately, the National Association of Realtors (NAR) reported that November’s Pending Home Sales Index (PHSI) decreased 0.9 percent to 106.9 in November from an upwardly revised 107.9 in October; however, it is 2.7 percent above the 104.1 level from November 2014.
On a regional basis, November’s PHSI in the Northeast decreased three percent to 91.8, while the PHSI in the West fell 5.5 percent to 100.4. The index in the Midwest rose one percent to 104.9 and the South saw a 1.3 uptick to an index reading of 119.9.
“Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains,” said Lawrence Yun, NAR chief economist, adding that despite evidence of “healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”
In other data news, the Federal Housing Finance Agency (FHFA) reported that its National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 3.85 percent for loans closed in late November, a decline of four basis points (bps) from 3.89 percent in October.
The FHFA also stated that the average interest rate on all mortgage loans was 3.86 percent, down four bps from 3.90 in October, while the average interest rate on conventional, 30-year, fixed-rate mortgages (FRMs) of $417,000 or less was 4.08 percent, down four bps from 4.12 in October. The effective interest rate on all mortgage loans was 4.01 percent in November, down three bps from 4.04 percent in October.
The average loan amount for all loans was $319,800 in November, up $11,200 from $308,600 in October, the FHFA added.