Welcome back in my video I posted Yesterday I talked about how red fin Shared that home prices overall based on The US meeting home sold price reached An all-time record high of course rates And um housing payments have been Increasing as well um and that was this Report right here I'll provide a link in The video description below if you guys Miss that video but in today's video I Want to talk about some leading Indications of home buying demand so we Can gauge which direction we're headed Because based on logging data based on Home sold prices we're at all-time Record highs so I have a lot to share in Today's video this video may be a bit Little bit longer I don't script my Videos but I have a lot of reports that Are all lead indications of um home Buying demand uh that I want to share With you guys so hope you guys get a lot Of value of today's video and thank you So much for joining me so the first Report I want to cover in today's video Is based on Nars or the National Association rors um pending home sale Index and that was posted on April uh 25th uh this by the way is according to Investing.com the streets forecast for The uh National associate rors pending Home sale index was an increase of. 3% That what they're expecting but it came In way above that at
3.4% this is also about double uh the Percent increase we saw in the previous Month this of course is a measure of Contracts being signed between buyers And sellers of exist exting analysis Therefore this is a leading indication Of closed home sales in the next couple Of months and here's that report from Nar just posted um today which is on April 25th the pening home sale index or Their phsi is a forward look indicator As I mentioned um that increased to 78.2 In March year-over-year pending Transactions were up by only .1% however it did increase by 3.4% Compared to February according to um Lawrence Yun who's Nars Chief Economist He stated the following March's pending Home sale index at 78.2 marks the best performance in a Year but still remains in a fairly Narrow range over the last 12 months Without a measurable um breakout Meaningful gains will only occur with Declining mortgage rates and Rising Inventory I don't often agree with him But I absolutely agree with him Regarding that because I would imagine Just kind of think of an environment in Which we have 5% rates if a rates were To decrease from 7.5 the best rates you Can get on average today down to 5% what Do you guys think will happen with home Buying demand if rates were to decrease
Big time and we saw more houses for sale Uh that will likely cause their index of A contract being signed to rise as well In regards to pending sales every Markets different right so you look at Um the four biggest US regions and they Are very quite a bit so the only Metro Or the Metro the only um um region that Posted a decrease compared to February Was actually in the midwest uh Falling By 4.3% in contrast the West surg by 6.8% In the South increased by 7% the Northeast uh Rose by 2.7% here's also a snapshot looking at Their index which I love this because it Is seasonally adjusted it's also Annualized as well making it very easy To compare month over Monon data um and Because it the the index here is Adjusted due to uh seasonality so Overall compared to last month um up by 3.4 but still relatively flat from one Year ago and the index at uh 78.2 um is higher compared to the Alltime record lows excluding the onset Of covid um at 72.8 back in August last Year additionally when you compare the Index right now compared to the years's A whole in 2021 when the index overall for the year Was at 115.2 uh that means that right now we're Down by about
32% from 2021 I mention that because we did see This increase from last month but Overall we're still at relatively low Levels especially compared to the craz We saw in 2021 um let's look really quick L here At the um year-over-year changes and I'll share some stats regarding my own Analysis other data to share how these Trends compared to years past uh going Back to 2010 so again on a month-to-month basis The only region that decreased was in The midwest but year-over-year uh it Fell in the Northeast down by 3% The South was down by 1.5% the West posted the biggest Increase up by 3.6% all right let's have a look at my Own analysis of their data I pulled These two columns from the National Association rers website about two years Ago now or a year and a half and just I Keep on adding this or adding on to this Uh each and every month so for March uh That index is at 78.2 looking at uh Historical Trends this is the highest Levels going back to February 20123 it uh increased by 0.1% Year-over-year And that only marks the second time in The last 34 months in which their index Increased on a year year basis and this
Month barely squeaked out a gain of 0.1% So we Bas basically have had you know More or less three years in which Pending home sales have been decreasing On a yearyear basis also when comparing What happened last year um last year This time uh their index decreased by 24 Uh% now it's up by1 1% so quite the turn Around compared to uh the huge Fallout We saw in the last half of 2022 through Much of 2023 however when looking at historical Averages and here's the average March Year- ofe change going back to 2010 Based on my nerdy formula there is a Gain of0 4% whereas this year it only Increased by .1% all right let's also Talk about the month-to-month change as Well that increased by 3.4 that's better Than the 3.9% decrease we saw back in March of 20123 and on top of that it's actually Higher than the long run average as well Because the long run average is a Decrease of 1% from February to March Each and every year now it's up by 3.4% also I add this as well when Looking at their Index this March Compared to March of 2019 obviously pre- Pandemic era we're down by 28% and from March of 2018 down by 27% so even though we're up slightly From a year ago and up from last month We're still way below um pre pandemic
Norms in addition we kind of have this Tale of two different markets because This index is based on existing houses But looking at um brand new home Construction um it's actually a little Bit different so pendings of exist Existing houses are counted the same way More or less as sales of brand new home Construction because the US Census BR Defines a new home sale is when a home Builder accepts an offer from a home Buyer or gets a deposit for a brand new House that could be a dirt lot a Homeowner construction or a completed um Sale or completed um house so this index From Nar can be more or less um compared To new home sales of brand new home Construction because that's based on a Contract being signed they're both Measured that way also in March pending Sales Rose by. 1% year year for existing Houses compare that to brand new home Construction it increased by 8.3% also pending sales for existing Houses increased by 3.4% from February to March this year Yet new home construction sales surg by 88.8% during the same time period as I Mentioned home builders are still being Able to drive sales by offering Incentives so for example money towards Buyers closing cost and of course a Lower than Market U mortgage rate which Is enticing home buyers to replace
Offers on brand new houses I also want To share a mortgage rate update with you Guys as well because again average uh 30-year fix rate mortgage rates Increased to a femon high on Thursday April 25th which is the time of filming This video um I found this really good Chart showing uh the relationship to Stocks or the stock market in general And also the 10-year uh treasury yield Uh because once uh GDP and pce data was Released this morning uh stocks Absolutely tanked um when I woke up this Morning I think it was down by over 600 Points a dow and the tenure was up by Over or was up to over 4.7% and that was because GDP came in Slower than expectations and pce which Is a measure of inflation came in hotter Than expected and that's this right here Uh this is on um Investing.com uh GDP for q1 this year Came in at 1.6% the forecast was a gain of 2.5 the Previous reading which was in Q4 last Year up by 3.4% so overall uh goods and services Produced by the United States um are Slowing in q1 this year on top of that Core pce which is the uh personal Consumption expenditure or the pce Report uh that's a measure of goods and Um services that are consumed by Americans excluding food and energy that
Surg by 3.7% the forecast was a increase of 3.4 And what's really bad here as well the Previous reading was a gain of 2% now We're at 3.7% so the odds of a future rate cut by The FED is getting less and less likely Um the odds like last time I saw um According to uh the CME fed watch tool a Really good tool if you want to see the Odds of future rate cuts by the FED um Is only calling for one to two rate Cuts This year and potentially not to see a Rate cut until September but there is a A higher chance or a increasing Likelihood we're going to see no rate Cuts this year at all um so absolutely Wild I mean we're not going to see any Rate Cuts anytime soon because we're Seeing that inflation data is actually Coming in hotter than expected it's Moving in the opposite direction so um That is going to keep it uh this Environment for higher than longer for Mortgage rates and of course um you know Interest rates you pay for helw credit Cards Etc So speaking of rates as of Today on April 25th uh for people with Great credit by the way the average 30-year fix according to the Morgan News Daily is at 7.52% that's a 13 basis point increase Compared to yesterday jumbo is at 7.68% and FHA and VA loans is around 7%
Um what's pretty fascinating as well is That about one week ago uh the the Difference between this year and last Year was only 73 basis points now it's About 1 percentage point the average at 7.52% uh for a 30-year fix one year ago We're at 6.50% on top of that we surpassed the Previous uh Peak um over the past couple Months uh that was set back in mid um Mid April so at 7.52% this the highest rates we've had Going back to Mid November of 2023 so in other words a femon high Which is making housing affordability Even bigger challenge especially given The fact we have all-time record highs For home sold prices on a national level All right let's change gears uh slightly Here I have a lot more to share in Today's video um all early signs of home Buying demand because again when rates Increase that should uh decrease home Buying demand as people decide to you Know quit on buying a house or they just Get price out of the market um so time Will tell I'll keep you post on that so Here's a a report I found from the National Association rors uh this is for The month of March just posted a couple Days ago I believe it says us showings These are real estate agents showing Houses to their home buyers that
Increased by 6% compared to March of 2023 so we are seeing more real estate Showings which is uh makes sense to me Given the fact we have depending on Which source you're looking at but Looking at realtor.com and out Research.com we have approximately 30% More House of sale on a national level From one year ago also this is a report Just posted a few days ago as well from The MBA regarding uh the measure of People submitting loan applications to Buy houses that's what they're called Their seasonally adjusted purchase index When their index increases that means That more people are applying for home Loan when it decreases that means that Less people are right that decrease by 1% from one week ago and was 15% lower Than 12 months ago according to jel KH Who's the NBA's vice president and Deputy chief Economist uh he say the Following uh rates continue to move Higher last week reaching their highest Level since late 2023 and putting a Damper on application activity the 30-year fixed rate increased for the Third consecutive week to 7.24% the highest since November of 2023 purchase applications declined as Home buyers delayed their purchase Decisions due to strained affordability And low Supply again historically Speaking going back to preco levels we
Have a low Supply uh but we're still up By 10 to 30% year-over-year the arm Share of activity U increased to 7.6% these are adjustable rate mortgages So in general we see rates increased We we tend to see more applications for People doing an arm because your payment On that is a lot less than a 30-year fix Um but we're still at 7.6% uh the I think it was like the 24mth high was around 12% uh and also The low was around 3% so we're kind of Right in the middle of that we do not Want to see this number Skyrocket Because I think back in 05 06 I think Around 80% were just wall rate mortgages Um and um so yeah we're way below those Levels any case something I found to be Uh interesting as well is that out of All the applications for home loans for Purchases and refi 30.8% were for refi even though rates Have been increasing so much uh this Tells me that people are doing a cash Out refi and getting cash out of their Houses because home prices have Increased so much but of course because A lot of people have credit card debts And other debts uh that they need to Take care of all right let's also change Gears a little bit as well looking at Google searches for homes for sale Because Google searches have been Decreasing the index right now is at 72
One year ago is at 92 this means that There's approximately 22% less interest For people searching for house for sale On Google and lastly let's have a look At redfin's home buyer demand index uh This is the index which measures the Amount of home tours and other home Buying services from redin agents that Fell 9% year-over-year on top of that It's at least a threeyear low during This time frame so just taking a step Back here you know please leave me a Comment below your thoughts regarding Today's video what the stats tell me in Today's video is that yes pending home Sales did increase compared to one month Ago but will that continue given the Rapid rise in mortgage rates uh let's Actually just look really quickly at That because over the past month uh this Was an index for the month of March so In April let's have a look at what Happened in April in April we started The uh month at 7.05% and now we're at 7.5% so rates Have increased by approximately 45 basis Points um over the past um few weeks but Back in um the start of March we were at Um around 7.08% but by the time we hit march8 8 We're at 6.85% and we're um right in line with Around 6.9% for much of the U month so I Only mentioned that because pending
Sales uh increased by 3.4% month to month but that was back When a rates were a lot lower than the Rates we're seeing today so I would Imagine we're going to see this Continued environment in which we're see A low level of combin demand and Therefore a lack of contracts being Signed and that will imply that close Home sales in the next coming months Will also remain low as well in my Opinion regarding home prices that Really depends on inventory levels and Mortgage rates and looking further ahead Until later this year uh the Unemployment rate as well but that's my Take what's your biggest takeway from Today's video please like And subscribe And we'll see you in the next video have An awesome day I [Music] [Music]
