High-end homes push NYC prices to all-time high
Selling prices of homes in New York city reached a record high in the second quarter of 2016.
The Real Estate Board of New York says that the average sales price of co-ops, condos and one-to-three family dwellings reached $1,018,000 driven by sales of high-end homes. There was also a 7 per cent rise in the middle segment of the market.
“While high-end Manhattan sales drove up the average sales price, the continuous demand for middle market homes is pulling the median sales price of homes higher as well,” said John Banks, III, REBNY President. “In response, the New York City residential sales market started to face some resistance as activity was down compared to last year.”
Although sales prices rose across all five boroughs, volume was lower with 11,031 sales, a 2 per cent decline from the second quarter of 2015. Only the Bronx (up 22 per cent) and Staten Island (up 6 per cent) saw year-over-year sales volumes rise.
Freddie forecasts lower mortgage rates, rise in refinance loans
The latest outlook from Freddie Mac sees a rise in the share of refinance mortgage loans to 49 per cent for 2016, up from its June forecast of 41 per cent; this will be driven by low interest rates.
The outlook for mortgage rates has also been revised downwards by 50 basis points in light of recent events including Brexit. Freddie forecasts an average rate for a 30-year FRM to be 3.6 per cent for 2016 and 4.0 per cent for 2017.
“The turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity," commented Freddie Mac chief economist Sean Becketti.
The house price appreciation outlook remains at 5 per cent in 2016 and slowing to 4 per cent for 2017.
Mortgage credit availability slipped last month
It was harder for homebuyers to obtain a mortgage in June as lending restrictions tightened.
The Mortgage Bankers’ Association’s Mortgage Credit Availability Index using Ellie Mae data declined 1.3 per cent to 119.8 with conventional loans seeing the greatest tightening followed by conforming, jumbo and government loans.
"Credit availability decreased over the month driven primarily by a decrease in availability of conventional conforming loan offerings," said Lynn Fisher, MBA's Vice President of Research and Economics. "In particular, a number of investors discontinued their conventional high balance 7 year adjustable rate loan programs (agency jumbo ARM) while leaving their 5 year and 10 year ARM programs unchanged."