We noticed the temperature drop this week as we celebrated the first day of Fall on Monday. We hope you’ve had a wonderful week and have some fun things planned for this weekend.
Our mortgage news roundup focuses on home prices, solar panels and falling interest rates. Let us know what you think in the comments.
July home prices rise, but pace is slowing
Home prices were up 12.4% for the 12 months through July, according to the 20-city Standard & Poor’s/Case-Shiller Index released Tuesday. July prices were also up a robust 1.8% from June. However, when adjusted for seasonal factors, July prices were up 0.6% from June, the smallest month-to-month increase since September of last year.
David Blitzer, chairman of the index committee at S&P Dow Jones Indices notes that prices may have peaked for a while because of the dramatic slowdown being seen in most major metro areas.
Since January, the inventory of existing homes for sale has risen 5%, on a seasonally adjusted basis, Jed Kolko, chief economist for real estate website Trulia said. Individual investors accounted for 17% of existing home sales in August, down from 22% in February, the National Association of Realtors reported.
Solar Panel Is Next Granite Countertop for Homebuilders
At least six of 10 largest U.S. homebuilders led by KB Home include the photovoltaic devices in new construction, according to supplier SunPower Corp. (SPWR) Lancaster and Sebastopol, two California towns, are mandating installation of solar panels into all new homes. Demand for the systems that generate electricity at home will jump 56 percent nationwide this year, according to the Solar Energy Industries Association.
Lashing panels to roofs during construction is about 20% cheaper than after a house is built. Homeowners who can afford the extra $10,000 to $20,000 cost in return for free power threaten the business of traditional utilities such as Edison International of California.
Power companies nationwide are losing business since they cannot reduce their rates to compete with the prices of residential solar systems. Those cost about $4.93 a watt in the first quarter, down 16 percent from a year earlier following an 18% slump in prices for solar panels and related hardware during the same period.
PG&E Corp. has said this jeopardizes their power grid because there’s less revenue to maintain the infrastructure. In California, consumers have already noted a rise in prices, and the utility companies may eventually pass on as much as $1.3billion in annual costs to customers who don’t have panels.
If you’re thinking of selling your home, having solar panels could be a positive selling point.
As Rates Fall, Loan Demand Rises Again
Realtor Mag is reporting that mortgage applications bounced back in the most recent week as interest rates fell, offering some temporary relief to borrowers.
The Mortgage Bankers Association’s index of mortgage application activity reflecting both refinancing and home purchase demand, increased 5.5 percent for the week ending Sept. 13. The previous week the index had posted an 11.2 percent gain.
Then this week, the purchase index, rose 7 percent during the week. Then, the refinancing index increased 4.9 percent. Two weeks ago, the refinancing index had dropped to its lowest level since June 2009 as mortgage rates had risen.