Housing starts edge higher
The overall level of housing starts ticked higher in July, driven by the multi-family sector.
Data from the US HUD and the Commerce Department show a 2.1 per cent rise in starts to a seasonally-adjusted annual rate of 1.21 million units. Single-family starts were up 0.5 per cent but the multi-family sector saw a 5 per cent rise in the month.
“Single-family starts, on a year-to-date basis, are up 10.6 percent and builders are cautiously optimistic about market conditions,” said NAHB Chief Economist Robert Dietz. “However, the permit trends indicate that supply-side headwinds, such as shortages of lots and labor, continue to affect the housing sector.”
The Northeast saw the largest gain (15.9 per cent) followed by the South (3.5 per cent) and Midwest (2.3 per cent) while the West saw a 5.9 per cent decline.
Millennial mortgage credit scores increased in June
Young Americans are continuing to increase their credit scores according to the latest data from Ellie Mae. The average FICO score of millennials who closed a home loan in June was 723, up from 722 in May and 721 in April.
Conventional loans made up 60 per cent of millennials’ closed loans in June, holding steady from May; FHA loans increased to a 37 per cent share of all mortgages closed in the month.
“Economic uncertainty may be contributing to a general tightening of credit, which could explain why we are seeing a slight uptick in the average FICO scores for closed loans to millennials,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “We also continue to see FHA loans play a significant role in helping millennials make their homeownership dreams a reality. These types of loans make up 37 percent of all closed loans to this generation, compared to just 23 percent of closed loans across all generations of homebuyers.”
Affordability hits home sales in California
Home sales in California were down by 4.1 per cent in July compared to June and down 5.1 per cent from July 2015.
The California Association of Realtors says that there were 415,840 sales on a seasonally-adjusted annualized rate and year-to-date sales are down for the first time in more than 18 months with a 0.3 per cent drop compared to last year.
Tight inventory is pushing median prices higher, up 3.9 per cent year-over-year; but the latest figures show them easing with a 1.8 per cent decline statewide in July compared to the previous month.
“California’s median home price rose again in July from last year, but the pace of increase has clearly slowed down in recent months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While fundamentals such as increasing household formation and strong job creation continue to fuel housing demand and support price growth, low housing affordability and reduced buying power of home buyers has put a cap on how fast the statewide median price can grow.”