09/12/2021
Now that everyone’s put away their summer whites, grabbed their pumpkin lattes and sent their kids off to school, it’s time to get back to business.
THE MARKET
The Producer Price Index (a measure of inflation) rose 8.3% year-over-year in August as the rat moves through the python and supply chains reset post-lockdown.
Food prices are up 2.9% on the back of an 8.5% rise in meat prices.
Lumber prices are coming back down to earth – up 4% year over year, but down 19% in the last month. If lumber falls in the forest and nobody is around to hear it, does it have a price?
Caffeinated Trends
With Ryan Schoen, Senior Data Analyst – Rocket Mortgage SM
My morning routine probably looks like yours.
Make my first pot of coffee.
Read and summarize the latest trends on jobs and inflation. (No? Just me?)
Reports keep pouring in, letting us know mortgage rates are still near all-time lows and housing inventory is tight. There are so many more interesting observations happening beneath the surface.
Thankfully, Rocket Pro TPO has a live collection of open-sourced market reports known internally as the “Economic Library.” It helps to have all this info on one platform so we can keep an eye out for the latest and greatest housing, mortgage and econ trends.
As I was digging in this week, I put together a few graphics I’d like to share with you:
1. Mortgage Industry Employment : The mortgage industry shows no sign of slowing down its hiring pace. Since 2010, total head count has sustained its trend upward.
Mortgage Professional Headcount Since 2000
2. Home Sales: Slowing home sales suggest some push back from buyers as home prices have continued to rise.
Home Sales Seasonally Adjusted Annual Rate
3. Existing Condo Sales Dip A Bit: Condo sales have fared well during the pandemic. Even the recent dip to 12% of total existing home sales bodes well for the trend toward condos when we zoom out and look at the larger trend.
Total Existing Home Sales By Property Type
4. Refinance Applications: When we read rates are near all-time lows, we should believe it. The relationship between the red and blue lines below tell the tale.
Mortgage Bankers Association: Refinance Applications Since 1990
5. Mortgage Credit Availability: The mortgage credit box remains well below pre-pandemic levels as agencies and lenders appear to take a wait-and-see approach.
Percent Change In Mortgage Credit Availability Compared To March 2012
6. SPOTTED – Jay Powell announcing the first post-COVID rate hike
WHAT THE "PROS" ARE READING
July Rental Data: Buying a Starter Home is More Affordable than Renting in Nearly Half of the Largest Markets
The never-ending “buy vs. rent” debate is as hot as ever these days. Realtor.com makes the case that “renting” continues its squeeze in nearly half of the largest U.S. markets.
National Rental Trend By Unit Size
Buying a starter home was more affordable than renting in 24 of the 50 largest metro areas.
In the 50 largest metros, the median rent was $1,607, up 9.8% year-over-year.
Rents for all unit sizes are at series highs.
Studio: $1,315, up 5.6% ($70) year-over-year
1-bed: $1,495, up 9.5% ($130)
2-bed: $1,802, up 10.9% ($177)
In these markets, the monthly cost to buy was 15.5% ($216) lower than renting, on average.
Condo Prices Rise At Least 20 Percent In Majority Of Oceanfront Counties Around U.S.
Condos near oceanfronts cost more. No surprise there. But a 20% increase changes the landscape. 50% of those oceanfront countries surpass the typical $305,000 condo price nationwide, while 50% fell below.
There condos are located matter. Especially in the Southern U.S.
Share Of Condo/Co-Op Existing Home Sales By Region
Source: Rocket Mortgage Economic Library
The Southern region of the U.S. had 69,616, or 67%, of the 104,359 condo sales in the 86 counties with sufficient data to analyze during the second quarter of 2021.
Median condo prices increased by at least 20% from the second quarter of 2020 to the second quarter of 2021 in 47 of the 86 oceanfront counties with sufficient data to analyze, or 55 percent.
Have a condo in mind? Leverage our Condo Simply tool to see if it's already approved.
Building Materials Prices: Large Increases Year-To-Date
Limited existing housing inventory and the corresponding price increases are caused by several factors, including the cost of building new homes. The price of new housing materials has risen significantly, YTD.
Building Materials YTD Price Increases By Type
The prices of goods used as inputs to residential construction, including and excluding energy, have risen 19.0% and 12.0%, respectively, year-to-date (YTD).
The price of steel mill products increased 81.3% YTD following a 2020 increase of 11.1%.
Copper pipe and tubing witnessed an increase of just under 35% YTD.
This article leveraged the U.S. Bureau of Labor Statistics’ Producer Price Index report. As mentioned up top, The PPI report for August is hot off the presses.
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