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CCL Market Update: Home Sales & Prices, Nonbank Lenders vs. Big Banks, Mortgage Rates

The past week of economic news was relatively light, with much of it focusing on the housing market. House prices were on the rise in February, according to the Federal Housing Finance Agency’s Home Price Index. After a 0.3% gain in January, February house prices increased by 0.7%. The year-over-year price increase was also favorable at 5.4%, compared to 5.1% in the previous month.

Existing home sales saw a 6.1% increase in the month of March to a 5.190 million annual rate. This is near the high end of analysts’ expectations, and is the best rate since September 2013. Single-family home sales increased by 5.5% to a 4.590 million rate, and condo sales had a whopping 11.1% gain to a 600,000 rate. The median price for existing homes in March was up by 5.1% to $212,100, and the year-over-year median had an increase of 7.8%, the best reading since February of last year. Market analysts predict that the improvement in prices for existing homes will help bring more homes into the market, and consequently boost future sales.

New home sales did not follow the upward trend of existing home sales in March, with a drop in sales of 11.4% to a 481,000 annual rate, although 4,000 new homes came into the market over the course of the month. The median price for new homes fell by 1.5% to $277,400 in March, and the year-over-year median price also dropped by 1.7%, which continues to point to weakness on the new homes market.

Nonbank Lenders vs. Big Banks

Spring is bringing an increasing number of homebuyers this year, however, big banks are losing market share, which continues to open the door for the independent, nonbank lenders.

According to the Mortgage Bankers Association, volume and profit of these nonbank lenders are up significantly from a year ago, especially their share of all lending numbers. A publication from Inside Mortgage Finance reported that nonbank lending rose to 37.5% of the market during 2014, up from 13% back in 2012. Editor Guy Cecala said that this can be attributed to “a combination of nonbanks being more aggressive, both in terms of rates and underwriting, and large banks pulling back slightly in the conforming markets.”

Those leading nonbank lending growth include Quicken and Penny Mac, as well as other smaller nonbanks, like SLO County-based Central Coast Lending. Read the full article HERE.

Mortgage Rates

National mortgage rates continued to display downward motion over the past week. According for Freddie Mac’s weekly mortgage rate survey from April 23, the average rate for a 30-year fixed conventional loan is 3.65%, slightly down by 2 basis points from last week’s average of 3.67%. This is the lowest 30-year conventional average rate since mid-February. Overall, rates for most loan programs remain near their 2015 lows.

Local rates have increased slightly, but still remain low. The 30-year fixed conventional went from 3.664% APR to 3.674% APR over the past week, an increase of 10 basis points. The 30-year High Balance, FHA 203k, and Jumbo programs also had higher APRs this week, with increases ranging from 7 to 116 basis points. The 15-year fixed conventional, 30-year FHA, 30-year VA, and 30-year USDA programs all remained unchanged. Visit our Mortgage Rate Update page for more on current local mortgage rates.

With rates near the lowest levels this year, now is a great time to consider a home purchase or refinance! Give us a call at 805.543.LOAN to discuss your mortgage options.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile