Against the wind: U.S. housing appears to be insulated so far from the cooling global economy, The Associated Press reports. Home values and rental prices are steadily rising, fueled by strong demand and a tight supply of available properties, a pair of reports out today show. The solid demand drove sales growth early this year and spurred additional construction. The Standard & Poor’s/Case-Shiller 20-city home price index climbed 5.1% in the 12 months that ended in August—a level many economists view as more sustainable than the sharp double-digit gains at the start of 2014. And in September, median rents nationwide rose a seasonally adjusted 3.7% from a year ago, according to real estate data firm Zillow. Read the full story.
Something new: Sales of new homes plunged sharply in September to the slowest pace in 10 months, as higher prices and slower overall economic growth weigh on the housing market. The Commerce Department says new home sales slumped 11.% last month to a seasonally adjusted annual rate of 468,000, the lowest level since November 2014. September’s drop ended a two-month streak of accelerating sales. The Associated Press reports that Americans’ zeal for newly built homes took off this early year—soaring up 17.6% during the first nine months of 2015—but now appears close to topping out. The slowdown has yet to hit sales of existing homes as drastically, but the September pullback in newly built properties was severe. Read the full story.
Following the money: Fannie Mae has announced it will start taking a longer view of consumer credit histories when evaluating mortgage applications, a change that could help some borrowers and hurt others, The New York Times reports. Beginning in mid-2016, Fannie Mae will require lenders to use what is known as “trended credit data” when submitting loan applications through the agency’s proprietary automated underwriting system, Desktop Underwriter. This widely used automated system can quickly tell lenders whether a borrower is eligible for a conforming loan and under what conditions. It will also provide more of a credit chronology going back 30 months, showing whether payments were made on time, and more importantly, whether borrowers tend to carry balances from month to month, pay more than the minimum or pay off balances in full. Read the full story.
