Home Prices Rise Again and Inventory Remains Tight

Home Prices Rise Again and Inventory Remains Tight

Steep competition in the housing market and low supply are still heating up home prices.


On Tuesday May 30, we got the March numbers for the S&P CoreLogic Case-Shiller Indices (the index is always two months behind). It showed that home prices rose 0.4% in March after rising 0.2% in February, and they are up 0.6% year over year.


According to the index, prices have only dropped 2.3% since they peaked in June 2022. This small drop is nowhere near the doomsday results that the media has been warning of, and is only a small price correction.

All Other Price Reports Show Positive Movement

The Federal Housing Finance Agency (FHFA) also released their housing report for Q1 of 2023 this week. Their report reported that prices rose 0.6% in March after rising 0.7% in February just 0.1% in January. What’s even more shocking is that the FHFA number show that prices are now 0.73% higher than they were at the previous peak last June!


Both the FHFA and Case-Shiller indexes use a similar methodology, but the most significant difference is that the FHFA index collects data from mortgages that have been purchased or securitized by Fannie Mae or Freddie Mac ONLY (a.k.a. conventional mortgages). It does not include data from cash purchases or non-conforming jumbo mortgages like Case-Shiller.


Homes purchased with cash typically include some price reductions, and higher-end homes purchased with jumbo loans have had more price volatility compared to conventional home purchases. This is why the Case-Shiller numbers are lower than the FHFA numbers. However, both indexes still paint a good picture of where home prices are heading, and they are not the only ones who show positive movement.


We’ve already had the March numbers from other well-known home price reports, and the FHFA and Case-Shiller reports further underline our assertion that the housing market dip is over and prices will continue to appreciate.


Our friends at MBS Highway recently brought up a good point that homebuyers should be aware of when it comes to analyzing the annual appreciation numbers. In the coming months, year-over-year appreciation will eventually turn negative as the comparisons move closer to the peak in June of last year. When this happens, the media will once again go full speed with fear-inducing headlines about a housing crash.


DON’T LET THIS FOOL YOU! Once those comparisons are past, the year-over-year appreciation numbers will bounce back very quickly. We agree with Barry Habib and the team at MBS Highway’s prediction that when all is said and done, we will see a cumulative 5-6% home appreciation in 2023.

Overcoming Housing Market Fears

By Luminate Marketing Team • 06 May, 2024
The recent headlines broadcasting mortgage rates surpassing the 7% mark have instilled a sense of apprehension among potential homebuyers. In a market perceived as increasingly unaffordable, it's easy to feel discouraged. However, with the right mortgage strategy, you can transform this challenging market into an opportunity.  Historical Perspective on Mortgage Rates While current rates hovering around 7% seem daunting, a historical review reveals a broader context. During the early 1980s, mortgage rates soared to 18% and even in more stable times, rates have frequently fluctuated above 10%. This historical perspective is vital because it demonstrates that while today’s rates are higher than in recent years, they remain within a historical long-term normal rate range.

Why Cash Buyers Dominate the 2024 Real Estate Market

By Luminate Marketing Team • 28 Apr, 2024
The 2024 real estate market is ROUGH. Losing to multiple offers, emotional frustration, and the stress from competing offers is discouraging to say the least. Notably 32% of home sales are being clinched by all-cash buyers, the strategic advantage of wielding cash has never been clearer. This resurgence in all-cash transactions underscores a market where immediacy and certainty reign supreme, especially as home prices continue their upward trajectory against a backdrop of scarce inventory. Within this context, it’s prudent to evaluate every option that can help you sell an existing home and get your offer accepted on a new home. Navigating the Alternatives iBuyers : These entities provide a quick, straightforward selling process for homeowners looking to bypass the traditional market. By making instant cash offers, iBuyers appeal to those seeking immediacy and convenience. However, this often comes at a cost, including service fees and potentially lower offer prices, as the iBuyer model is designed for speed over maximizing seller profits. Power Buyers : Power buyer programs cater to homeowners wishing to purchase their next home before selling their current one. They typically employ financial tools like bridge loans to facilitate this process, offering a solution to the timing mismatch between buying and selling. While this approach adds flexibility, it can also introduce complexity and additional costs into the transaction. But it's important to remember that not all of the innovative iBuyer and Power Buyer programs are the same. It's all about finding the right fit for your situation. Luminate's Unique Approach At Luminate Home Loans, we've carved out our own niche in the market. We offer a program that turns our clients into cash buyers. This isn't just a minor perk; it's a game-changer. Being a cash buyer makes your offer far more appealing to sellers, cutting through the delays that often come with loan approvals. Our approach is designed with you, the homeowner, in mind. We give you the immediate advantage of a cash offer, coupled with the flexibility to choose the best financing option for you down the line. It's about giving you control and confidence in your home-buying journey. If you're navigating the complexities of buying and selling homes, our program might just be the solution you've been searching for. We focus on ensuring our processes are straightforward, your personal information is secure, and the transition to your new home is as smooth as possible. With Luminate, you're not just moving houses. You're stepping into a well-thought-out system designed to get you into your dream home with ease and certainty. If this sounds like what you need, we're here to make it happen.

Understanding Economic Shifts: How Rising Fast Food Prices Intersect with the Housing Market

By Luminate Marketing Team • 21 Apr, 2024
Have you been noticing the prices of fast food and other products going up? Well, you're not alone. Across the country, families are feeling the financial pain of previously low-priced items suddenly costing double (or triple!) what they’re used to. For example, a lunch for two in California at a fast food chain can easily be $40 nowadays, which is a big jump for places that tout “cheap fast food.” But why exactly is this happening, and what does it have to do with you buying a home? Keep reading for more insights. Why Are Prices Going Up? Starting in April of 2024, the minimum wage for fast-food and healthcare facility employees in California was increased. As a result, their wages went from $16/hour to $20/hour in order to provide better wages and living conditions for these workers. This rise in minimum wage, while much needed for the economy, is happening all across the nation. And when businesses have to pay their employees more, they often raise their prices to cover the costs. Which, unfortunately, means the burger and fries you love might cost more now. What Does This Have to Do with Housing? In recent news, you may have heard of President Biden’s housing plan to help first-time homebuyers and to reduce housing costs. This plan would give money to first-time homebuyers and some families looking to sell their homes. But just like with the fast-food industry, the effects can vary. In some places like California, where not enough houses are available, making homes more affordable might not be enough. In other places, it might help a bit more. So, What's the Best Move for Homebuyers? If you're thinking about buying a home in the near future, it's good to know about these changes and plans. By staying informed and working with an expert lender, you can take advantage of any changes as soon as they happen. But even though extra money in the economy sounds great, it's important to look at the whole picture, like how many houses are available and how much they cost. If more homes become available and the costs of borrowing money for a home go down, this could be a better outcome for buyers vs money that is thrown into the economy. Conclusion Understanding these changes can help you make better, informed choices about your financial future. Whether you're saving up for a big purchase or just deciding where to grab lunch, let us help you save money where it counts! Reach out to us today so we can help you navigate your home-buying journey without having to skip out on the fries.
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