Home Prices Drop 0.6%, Raising Questions About Loan Limit Change

Today brought the release of the two biggest home price indices (HPIs) for the month of July from S&P Case-Shiller and FHFA. Both HPIs showed a marked deceleration in home price appreciation in June with Case Shiller up only 0.2% and FHFA up 0.1%. Both moved into negative territory in July with Case Shiller down 0.4% and FHFA down 0.6%. The notion of falling home prices is potentially troubling to those who lived though the Great Financial Crisis (GFC) in 2008. But while the present day price contraction has yet to fully play out, there are still significant differences from 2008. In fact, even if the FHFA price index (the broader of the two) dropped by roughly 20% as it did by the end of 2008, it would merely take year-over-year numbers back to flat. While "flat" year-over-year home price appreciation doesn't sound so bad (and probably wouldn't be so bad in the big picture), getting there from here wouldn't be fun in terms of home equity dollars. In 2008, a 20% decline was around 50k for the average home. Now it would be 80k. Someone who bought a 500k home near the peak could own a 400k home if a 20% correction plays out. But that is far from a certainty at this point--especially with persistent inventory issues becoming worse in the past 2 weeks as sellers balk at the idea of leaving their existing mortgage rate for something more than twice as high. All this in addition to the fact that mortgage/housing markets have been operating in an infinitely more sustainable way than in the years leading up to the GFC. The biggest issue/problem was an external one (pandemic and the associated fallout on the housing supply chain) and its worst offense was causing prices to appreciate too quickly.

September 27, 2022 Download our Mobile App: Download our Mobile App: Housing News Home Prices Drop 0.6%, Raising Questions About Loan Limit Change Today brought the release of the two biggest home price indices (HPIs) for the month of July from S&P Case-Shiller and FHFA. Both HPIs showed a marked deceleration in home price appreciation in June with Case Shiller up only 0.2% and FHFA u... (read more) Housing News New Home Sales Skyrocket, But It's Unsustainable and Here's Why The monthly New Home Sales data from the Census Bureau is usually just "there"--one of several monthly housing-related reports that makes no promises about being interesting or saying anything very different from the other housing reports. Tod... (read more) Mortgage Rate Watch Yes, Mortgage Rates Are Now Over 7%, But It's Complicated It's no mystery that mortgage rates have been moving relentlessly higher in 2022. But how high is high? That will depend on a number of factors, including: The date and time of day of the quote (things change quickly) The lender in q... (read more) MBS Commentary Beware The False Hope in MBS Today Beware The False Hope in MBS Today MBS ended up with a nice little rally after 2pm that brought prices 3/8ths higher. Treasuries, on the other hand, set new long-term yield highs today. The latter... (read more) Rob Chrisman Processing, TPO, Co-op, Subservicing, Home Ownership Products; Q&A on Rates Yesterday Yesterday, before the yield on the risk-free U.S. 2-year note rose to 4.25 percent, I mentioned my cat Myrtle being offered a big signing bonus by the family next door because word of her mousing prowess has spread. Myrtle’s tight-lipped on the detai... (read more) Mortgage Rates Yes, Mortgage Rates Are Now Over 7%, But It's Complicated 30 Yr. Fixed Rate 7.08% +0.21% Rate Change Points Mortgage News Daily 30 Yr. Fixed 7.08% +0.21 0.00 15 Yr. Fixed 6.33% +0.18 0.00 30 Yr. FHA 7.00% +0.62 0.00 30 Yr. Jumbo 6.05% +0.05 0.00 5/1 ARM 6.12% -0.08 0.00 30 Yr. VA 7.00% +0.60 0.00 Updates Daily - Last Update: 9/27 15 Yr. Fixed Rate 6.33% +0.18% Rate Change Points Freddie Mac 30 Yr. Fixed 6.29% +0.27 0.90 15 Yr. Fixed 5.44% +0.23 1.00 5/1 Yr. ARM 4.97% +0.04 0.40 Updates Weekly - Last Update: 9/22 Rate Change Points Mortgage Bankers Assoc. 30 Yr. Fixed 6.25% +0.24 0.71 15 Yr. Fixed 5.40% +0.10 1.06 30 Yr. Jumbo 5.79% +0.23 0.46 Updates Weekly - Last Update: 9/21 MBS / Treasuries Beware The False Hope in MBS Today UMBS 30YR 5.0 97.19 +0.69 Price / Yield Change MBS UMBS 5.0 97.19 +0.69 UMBS 5.5 99.20 +0.72 GNMA 5.0 97.59 +0.83 GNMA 5.5 99.55 +0.95 Pricing as of: 9/27 5:41PM EST 10 Year US Treasury 3.9492 +0.0207 Price / Yield Change US Treasury 2 YR Treasury 4.287 -0.058 5 YR Treasury 4.196 -0.003 7 YR Treasury 4.123 +0.011 10 YR Treasury 3.949 +0.021 30 YR Treasury 3.826 +0.080 Pricing as of: 9/27 5:41PM EST Latest Video Consumer confidence comes in at the best level since April '22 The 9am Bond Report - September 27, 2022 Powell's doom loop is spreading to other central banks, says Rockefeller In... The Bank of England lags U.S. Fed policy, says Jim O'Neill Around the Web CNBC Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index Calculated Risk Blog New Home Sales Increase to 685,000 Annual Rate in August CNBC Feds Evans says hes getting a little nervous about going too far, too fast with rate hikes Wall Street Journal Lumber Prices Fall Back to Pre-Covid Levels Realtor.com The U.S. Is Running Short of Land for Housing CNBC Home purchase cancellations are above 15% for the second straight month. It's important to know the financial repercussions Calculated Risk Blog New Home Sales and Cancellations: Net vs Gross Sales CNBC Home purchase cancellations are above 15% for the second straight month. It's important to know the financial repercussions Calculated Risk Blog Housing September 26th Update: Inventory Increased 0.9% Last Week; Hits New Peak for 2022 CNBC 3 charts show the UK's market meltdown CNBC Wharton's Siegel says Jerome Powell owes 'the American people an apology' for poor Fed policy CNBC Bank of England says its monitoring markets 'very closely' after pound falls to historic low CNBC Treasuries stumble as markets digest Fed economic commentary and stocks slip

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