August 2017

Mortgage Rates Fall To Lowest Level Since November

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week, dropping to their lowest level since last November. The decline was seen across all loan categories, except 15-year fixed-rate mortgages which were unchanged from the week before. Michael Fratantoni, MBA’s chief economist, told CNBC that low rates were connected to current events. “Last week, mortgage rates dropped to their lowest level since the week of the November 2016 election as investors sought safety given the tense geopolitical environment, especially the concerns with respect to North Korea,” Fratantoni said. Still, despite rates moving lower, mortgage application demand was barely moved. The refinance index increased 2 percent but purchase application demand fell 2 percent, effectively cancelling out the gains. A look at last year’s levels, however, shows the number of prospective buyers requesting applications for loans to buy homes is actually 10 percent higher than at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

New Home Market Shows Improvement

The number of new homes that are built and sold has an effect on everyone who buys or sells a house. Mostly, this is true because of prices. Regardless of whether you’re interested in buying a new house, the number of new homes on the market helps determine prices for all houses. That’s because, new homes add to the number of homes available for sale, which helps alleviate upward pressure on prices. In short, good news for builders is good news for buyers. That’s why the most recent Housing Market Index from the National Association of Builders is encouraging. According to their most recent release, builder confidence rose in August. In fact, the index increased four points to 68, on a scale where any number above 50 indicates more builders view conditions as good than poor. Granger MacDonald, NAHB’s chairman, says demand is rising. “Our members are encouraged by rising demand in the new-home market,” MacDonald said. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.” More here.

Which Grocery Store Is Best For Your Home’s Value?

Living near a grocery store is generally considered a plus. After all, you never know when you’ll run out of something. And, if you ever have, you know it’s generally less frustrating to make a last-minute trip to the store when it’s just up the street. But have you ever considered how living near a grocery store will affect the price of your home? And, beyond that, which grocery store specifically is best for your home’s value? Probably not. But ATTOM Data Solutions has and they’ve recently released the results of their analysis. Because of the variety of local and regional chains, the analysis focuses in on three national chains: Trader Joe’s, Whole Foods, and ALDI. Among them, homes near Trader Joe’s saw the largest price appreciation. In fact, homeowners near a Trader Joe’s had an average 5-year appreciation of 67 percent. By comparison, homes near Whole Foods appreciated just 52 percent, while ALDI came in at 51 percent. But, before you rush out to find a home near a Trader Joe’s, you should know it would be ridiculous to make your buying decision based on this. Better to choose a house you love and hope it’s near a store you love just as much. More here.

The Real Reason There Are Fewer Homes For Sale

These days, many markets are suffering from a lack of homes for sale. And where there are fewer homes to buy, there are higher prices and more competition among buyers. But what’s behind the shortage? Well, a new survey reveals the real reason homeowners have decided to stay put and it’s probably not what you’d expect. The survey found simple demographics may be the biggest factor. A closer look at the numbers reveals that younger homeowners have plans to sell in the near future but the vast majority of baby boomers don’t. In fact, 85 percent of older homeowners said they had no plans to sell in the next year. This, however, isn’t that odd. Older Americans have always been less likely to move. The difference these days is that the overall population has grown older. The share of Americans between the ages of 55 and 74 has risen 30 percent in the past 30 years. That means, there are more older homeowners who aren’t that likely to put their homes up for sale. The good news, though, is that 60 percent of owners who said they were hoping to sell within the next year are millennials, which means there could soon be more affordable homes on the market for interested first-time buyers. More here.

Today’s Home Buyer Is More Market Savvy

One result of the housing crash is that American home buyers are now more savvy about the housing market. In addition to finding a house they love, they are also concerned with market fluctuations and whether or not they are buying at the right time. In fact, a recent survey from Value Insured shows 63 percent of all buyers and 72 percent of millennials say they worry that they’ll buy a house just as home prices peak. This concern is natural considering recent history. However, the longer you live in a house, the less likely you are to suffer the effects of market fluctuations. That means, if you’re buying a house you love and plan to live in for, at least, the next five to seven years, you can feel more comfortable buying regardless of where the market may be. Joe Melendez, CEO of Value Insured, says the fact that this is a common concern shows Americans are more informed these days. “Beyond the jitters, I see in our survey an increasingly informed nation of home buyers, who understand the risk of the market,” Melendez says. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.” More here.

Mortgage Rate Drop Boosts Application Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week and helped boost demand for both refinance and purchase loan applications. The decline, though slight, keeps rates in the same narrow range they’ve been for the past several weeks. Michael Fratantoni, MBA’s chief economist, told CNBC lower-than-normal mortgage rates continue to bring buyers to the market. “With rates trading in a narrow range, the purchase market continues to show strength, with application volume running about 7 percent ahead of last year,” Fratantoni said. Also helping prospective home buyers is the increasing availability of credit. This week, the MBA released their monthly measure of credit availability and found that lending standards continued to loosen in July. Combined with still-low mortgage rates, increasing credit availability helps home buyers and offers some relief from rising home prices. Of course, affordability concerns will persist but low mortgage rates and available credit can help home buyers balance some of the worry over handling higher home prices. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Housing Market Improves Despite Challenges

The National Association Of Home Builders’ Leading Markets Index compares current price, building permit, and employment levels to their previous norms in 337 markets across the country. The index is an effort to measure how quickly individual markets have recovered following the housing crash and financial crisis. According to the most recent release, 196 metro areas have returned to or exceeded their last normal levels of economic and housing activity as of the second quarter of this year. In other words, housing markets across the country continue to make gains, despite current challenges. Granger MacDonald, NAHB’s chairman, says the report shows that the recovery has been widespread. “This report shows that the housing and economic recovery is widespread across the nation and that housing has made significant gains since the Great Recession,” Granger said. “However, the lagging single-family permit indicator shows that housing still has a ways to go to get back to full strength.” Among the three main index components, building permits are still falling behind previous norms, while price and employment levels have largely rebounded. More here.

Survey Asks Americans About Real Estate Market

Every month, Fannie Mae’s Home Purchase Sentiment Index asks Americans how they feel about the housing market and economy. Their survey asks whether participants expect home prices and mortgage rates to rise or fall over the next year, whether it’s a good or bad time to buy or sell a house, and how they feel about the economy and their own personal financial situation. In July, the survey showed an increasing number of Americans feel secure in their jobs but uncertain about the direction of the economy. Because of this, housing numbers took a turn, with the number of Americans who think it’s a good time to buy or sell a house both falling. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said the decline among people who think it’s a good time to sell was surprising. “It’s clear that high home prices are a growing challenge helping to send buying sentiment to a record low,” Duncan said. “However, we find the notable decline in selling sentiment surprising.” With buyer demand high and the number of available homes for sale low in many markets, many consider this an excellent time for homeowners to sell, which explains why the decline comes as a surprise. More here.

Number Of Showings Up 10% Over Last Year

If you had any doubt that home buyers are active this summer and looking to buy, some new numbers should help put that notion to rest. New research shows that the number of showings – which refers to a professionally arranged tour of a home for sale – are up 10.3 percent nationally over the same time last year. Regionally speaking, the Northeast saw the largest jump, with a 15.2 percent increase as of June. However, the Midwest and South also saw double-digit improvements. In fact, only the West saw a slight year-over-year decline. The numbers are a good indication of how much interest there is this summer from potential home buyers. That’s good news for homeowners who are looking to sell their house, as it adds to the growing evidence that, in many markets, there are more buyers than homes for sale. Of course, that also means home buyers that are looking to buy this season should be prepared to move quickly, as good homes aren’t going to stay on the market very long. More here.

Today’s Homeowner Stays Longer, Sells For More

If you’re someone who is currently debating whether or not it’s a good time to sell your house, there are some new numbers from ATTOM Data Solutions that are worth taking a look at. The results of ATTOM’s Q2 2017 U.S. Home Sales Report shows that homeowners who sold their house during the second quarter of this year saw an average price gain of $51,000 over what they bought it for. That’s a 26 percent average return and the highest return since the third quarter of 2007. Daren Blomquist, ATTOM’s senior vice president, says homeowners are facing a tough choice in today’s market. “Potential home sellers in today’s market are caught in a Catch-22,” Blomquist said. “While it’s the most profitable time to sell in a decade, it’s also extremely difficult to find another home to purchase, which is helping to keep homeowners in their homes longer before selling.” That’s true. The report shows that homeowners who sold during the second quarter had owned their homes an average of 8.05 years, which is the longest homeownership tenure since the first quarter of 2000. More here.