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SEM News, thinkMortgage™

July 2017 Cal-Culator

SEM News, thinkMortgage™: August 15th, 2017

It’s an exciting – and hectic time – in the housing industry. The shortage of available homes is creating a feeding frenzy as homebuyers scramble to the finish line to submit their offers. In turn, home prices are on the rise and buyers are oftentimes forced to pay above the listing price if they want any chance at all. As a result, this month’s residential real estate index is staying at the previous month’s score of 8.7.

“Strong employment growth and home price increases have contributed to improved mortgage performance. Early-stage delinquencies are hovering around 17-year lows, and the current-to-30-day past due transition rate remained low at 0.8 percent,” said CoreLogic Chief Economist Frank Nothaft. “However, the same positive economic conditions helping performance have also contributed to a lack of affordable supply, creating challenges for homebuyers.”

Delinquent mortgages: As we’ve reiterated before, measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. In May, 4.5 percent of mortgages were delinquent by at least 30 days or more, including those in foreclosure, a decrease from May 2016’s level of 5.3 percent. Only North Dakota and Alaska saw increases in serious delinquency rates during this time. By comparison, in January 2007, just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and peaked in November 2008 at 2 percent.


Home Prices, Activity: According to Redfin’s Market Tracker, June saw the highest national median sale price – $298,000 – recorded in the index’s history. Atlanta’s median sales price was slightly lower at $267,000 with a noticeable 6.8 percent uptick from last June, according to the most recent Atlanta Realtors’ Market Brief.

Despite the high buyer demand, national sales only increased 1.9 percent compared to 2016 due to low inventory. Every record in market speed was again broken this month. The typical home sold in 36 days with 26.6 percent of homes sold above their asking price.

Inventory: Redfin also revealed the number of homes for sale decreased 10.7 percent from the previous month, marking seven straight months of double-digit, year-over-year declines. Inventory is now at a 2.5-month supply – the lowest the Market Tracker has ever reported since it began measuring data in 2010. Atlanta’s levels are slightly higher at a 3.2-month supply.

“This market is unlike any we’ve ever seen before,” said Redfin chief economist Nela Richardson. “Month after month, new records are set for the pace at which homes are going under contract. Demand continues to swell while supply troughs. For buyers competing in this market, it’s survival of the fittest.”

We’ll reexamine inventory levels next month in hopes of some relief during this robust period of housing activity.

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