For the month of June 2017, all RENT Check indicators showed great momentum comparing to previous month, May 2017 except DOM increased slightly by 1 day.
Median Lease: $1,395 – Increased from $1,383 previous month.
Average Lease: $1,577 – Increased from $1,553 just previous month.
Avg. Days on Market: 28 – Increased from 27 days of previous month.
Closed Rental: 2,461 – Summer is always the busiest season for landlord and renter, increased from 2,082 homes previous month.
Rent Check Quotient™: 3 : 10 – Rental supplies increased comparing to 1 :5 last month.
Rent Check Quotient™ (RCQ™) is the ratio of closed rentals and closed sales.
Thanks to the increasing rents, cap rates are now approaching 6.0% and some even getting over 6% this time of the year.
June, July and August are the peak of rental market whereas housing market starts to cool down, even though it is still hot out there at 100+ degrees.
Jobless claims hit a near 5-month low this week, supporting economic growth. Sustained labor market strength could contribute to higher rates.
The failure to pass a new health care reform bill has traders questioning possible tax cuts and infrastructure spending, and is supportive of lower mortgage rates.
Recent economic data has cast doubt on whether the Fed will raise policy rates again this year. Lack of inflation is supportive of lower mortgage rates.
Arizona’s 6.9% trails California (7.1%) and Texas (7.8%) per Freddie Mac House Price Index published on July 6, 2017. It is a value-weighted average of the state indexes where the value weights are based on Freddie Mac’s single-family credit guaranteed portfolio.
Giving the much higher property taxes levied by both Texas and California every year, Arizona home owners shall benefit more of the price increase at their lower cost of ownership.
Thanks to high-tech sectors in Washington state and Oregon, both housing market reflect exactly the same as the employment market. Washington advanced 12% year-over-year while Oregon stands on the 3rd place with its 10.4% following Florida’s 11%.
Credit scores are rising, as the national average FICO score hit 700 for the first time in history. FICO’s VP for scores and analytics said a 700 score is considered “very good credit.” Better credit scores can get buyers more favorable mortgage terms.
The chief economist at property information firm CoreLogic says “the market continues to benefit from improved economic growth.” Their CEO adds, “the rebound in the U.S. housing market continues to gather steam.”
A national listing site found that the biggest homeowner regret was not choosing a larger home, while the biggest renter regret was continuing to rent instead of buying.
Job growth surged to 222,000 in June, and jobless claims were also down this week. Strong employment keeps the Fed on track to raise rates again this year.
The producer price index, a key gauge of inflation, was up 0.1% last month. Fed officials are closely watching inflation, which pressures mortgage rates higher.
In testimony to Congress this week, Fed Chair Janet Yellen shared that the Fed will gradually raise policy rates and reduce balance sheet holdings this year.
30 Yr 3.875 to 4.125 APR 4.26
15 Yr 3.25 to 3.5 APR 3.61
5 Yr 3.125 to 3.375 APR 3.61
7 Yr 3.25 to 3.75 APR 3.78
30 Yr 3.625 APR 3.71
15 Yr 3.25 APR 3.37