Monthly Archives: October 2019

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose slightly last week, with increases for 30-year fixed-rate loans with conforming loan balances and loans backed by the Federal Housing Administration. Jumbo loans were unchanged from the week before. But, despite the week-over-week rate increase, demand for loans to buy homes remains higher than last year at the same time. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the purchase environment is stronger than last year. “While near-term economic uncertainty is still a factor, other fundamental issues, such as a lack of housing inventory in many markets, is preventing purchase activity from meaningfully rising,” Kan said. “However, purchase applications were still much higher than a year ago. This is a reminder that the purchase environment in 2019 continues to be stronger than in 2018.” The year-over-year improvement pushed purchase application demand 12 percent higher than last year, despite a week-over-week week decline. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Young Americans’ financial health is an important factor in the housing market. After all, first-time home buyers historically have accounted for almost half of all home sales. So whether or not younger Americans are ready to buy has an impact on home sales, inventory, prices, etc. That’s why new data from the National Association of Realtors’ consumer website is illuminating. The research shows that the average student loan borrower owes $34,500, which is $8,500 more than the typical down payment of $26,000. In other words, millennials – who hold most of that debt and are at, or approaching, the age when Americans normally buy their first home – may be delaying homeownership due to their student-loan debt. George Ratiu, senior economist with the NAR’s consumer website, says the cost of a college education is having an impact on the financial decisions of young adults. “Student debt has ballooned to an all-time high as the price of education continues to outpace wage growth, and this is holding back many potential buyers from being able to purchase a home,” Ratiu said. “Student debt is already impacting borrowers’ ability to buy a home and education debt is expected to hamper consumers’ financial decisions for many years down the road.” More here.

Everyone knows real estate is about location. If you’re looking to buy a house, the zip code you’re searching in will play a big role in determining the price of homes you find and the amount of competition you face from other home buyers. In short, conditions can vary widely from one neighborhood to the next. That’s why, though there are areas in the country where affordability is a concern and finding a home that fits your budget can be difficult, there are also areas where homes are still affordable to people making the median income. So where are the most affordable counties in the country? Well, according to new research from ATTOM Data Solutions, many of them are in the Midwest. For example, Wayne County (Detroit), Cuyahoga County (Cleveland), and Allegheny County (Pittsburgh) were all included among the areas still affordable to average wage earners. Other areas included on the most affordable list included Harris County (Houston), Philadelphia County, Mecklenburg County (NC), Fulton County (GA), Saint Louis County, Milwaukee County, and Marion County (IN). Not surprisingly, the most expensive counties were mostly located near major metropolises and on the West Coast. More here.

If you’ve lived in a home for a while, you’ve likely let some things go. Which means, when it comes time to sell, you’ll probably have a pretty substantial to-do list to get done before your home’s ready for sale. But though getting your house ready to put on the market can be stressful for home sellers, it isn’t the top thing that causes them stress, according to a new survey. In fact, the number one thing that stresses out sellers is timing. Selling a house within a desired time frame was named by 56 percent of respondents, followed closely by getting the right price for their house. And with 64 percent of participants saying they’re trying to time the sale of their current house with the purchase of their new one, it’s fairly easy to see why that tops the list. But though timing and price were the most common issues home sellers named, fixing up the house wasn’t far behind. Prepping the house was named by 52 percent of sellers as a point of stress. Overall, almost all respondents said they had some stress associated with selling their home. This isn’t surprising, however. After all, selling a house, buying a new one, and getting ready to move all at the same time is a major life change and a big financial transaction wrapped up into one. More here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell sharply last week. In fact, rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline brought mortgage rates to their lowest level since August. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said falling mortgage rates led to a surge in refinance activity. “As seen a few times this year, the large drop in rates caused another surge in refinance applications,” Kan said. “The refinance index increased 10 percent to its highest level since late August, with both conventional and government refinances experiencing an upswing.” The rate drop didn’t boost home buying activity, however. Purchase activity was relatively flat, though it remains 10 percent higher than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

When you’re ready to buy a home, the market conditions you encounter will partly be determined by your price range. First-time home buyers looking for an affordable, entry-level home will find very different conditions than someone looking to spend $750,000 on a house. Why is that? Well, the short answer is inventory. How many available homes there are in a particular price range will dictate how much competition buyers encounter and how fast prices are rising or falling. These days, for example, the high end of the housing market is better balanced than the lower tiers. In fact, according to new numbers from the National Association of Realtors’ consumer website, the inventory of homes available for sale above $750,000 is up nearly 5 percent year-over-year. On the other end of the market, the inventory of homes under $200,000 is down 10 percent from last year. That means, first-time and entry-level home buyers should prepare for a more competitive market than buyers of more expensive homes. And, with falling mortgage rates motivating more mid-market buyers, there is concern that inventory levels – which had recently begun to improve – may have trouble keeping up with future demand from buyers. More here.

Fannie Mae’s monthly Home Purchase Sentiment Index is a monthly gauge of how Americans feel about the housing market, economy, and their personal financial situation. The survey asks participants for their opinions about home prices, mortgage rates, their job, income, and whether or not they think now is a good time to buy or sell a home. According to the most recent release, respondents are feeling optimistic about the housing market but are beginning to feel less confident about economic conditions and job security. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says sentiment is still strong despite consumers becoming a little more cautious. “Consumer sentiment remains relatively strong overall, though uncertainty about the economy and individual financial circumstances appear to be weighing on housing market attitudes a bit more than a month ago,” Duncan said. “Views about the direction of the economy held relatively steady, and the share of respondents who say it’s a good time to buy or sell a home rose slightly. However, consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month.” More here.

When you’re young, there are many things that might lead you to look for a new place to live. Maybe you’re moving because you want to be closer to a new job or you’ve started a family and need more space. Whatever the case, there’s nothing strange about being on the move when you’re young. But, according to a new analysis, young adults in America today are moving more often than previous generations did. In fact, the percentage of 25-to-34 year olds who have lived in their home for less than two years has risen to 45.3 percent in recent years. By comparison, it was 33.8 percent in 1960. So what accounts for millennials’ mobility? Well one big difference between today’s young adults and past generations is that younger Americans tend to get married later in life these days. That means, settling down and establishing a long-term living situation is less of a priority. There have also been changes to the way the typical young American builds a career. Where, in the past, it was common to get a job and stay with the same company for many years, today young adults are more likely to move from one job to the next in order to achieve their professional goals. More here.

According to the latest Applications Survey from the Mortgage Bankers Association, average mortgage rates fell last week from the week before. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Naturally, the decline led to an increase in demand for mortgage loans. In fact, application demand was up 8.1 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said most of the improvement was due to rising refinance activity. “Borrowers responded to these lower rates, leading to a 14 percent increase in refinance applications,” Kan said. “Although refinance activity slowed in September compared to August, the months together were the strongest since October 2016. The slight changes in rates are still causing large swings in refinance volume, and we expect this sensitivity to persist.” Demand for loans to buy homes also rose and is now 10 percent higher than it was last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.