Monthly Archives: November 2020

The monthly mortgage payment on the typical single-family home is now $1,059, according to new third-quarter data from the National Association of Realtors. Up $27 from last year, the increase comes as the NAR’s most recent quarterly price report shows home prices up in every measured metro area. In fact, more than half of the included cities had double-digit increases and all four major regions were up year-over-year. Lawrence Yun, NAR’s chief economist, says rising prices are going to affect affordability conditions, regardless of how low mortgage rates go. “Favorable mortgage rates will continue to bring fresh buyers to the market,” Yun said. “However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.” But why are prices rising? Well, part of it is too few homes for sale. The pandemic caused already low inventory to fall further. And too few available homes, combined with elevated buyer demand, has caused more competition and bidding wars, which push prices higher. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were down last week for 30-year fixed-rate mortgages with both conforming and jumbo balances. Loans backed by the Federal Housing Administration and 15-year fixed-rate loans were both unchanged from the week before. But despite rates still hovering near record lows, mortgage demand slowed from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says home buyer demand is still higher than last year, but low inventory is starting to take its toll. “The purchase market continued its recent slump, with the index decreasing for the sixth time in seven weeks to its lowest level since May 2020,” Kan said. “Home buyer demand is still strong overall, and activity was up 16.5 percent from a year ago. However, inadequate housing supply is putting upward pressure on home prices and is impacting affordability – especially for first-time buyers and lower-income buyers.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Favorable mortgage rates have helped the housing market handle affordability challenges, low inventory, and the coronavirus. With record low rates counteracting continuing price increases, demand from home buyers has stayed strong and the market has been resilient. And fortunately, according to a recent forecast from Freddie Mac, low rates aren’t going anywhere any time soon. “One of the main drivers of the strong housing recovery is historically low mortgage interest rates,” the forecast reads. “Given weakness in the broader economy, the Federal Reserve’s signal that its policy rate will remain low until inflation picks up, and no signs of inflation, we forecast mortgage rates to remain flat over the next year.” In fact, Freddie Mac says rates should continue to hover just above record lows through the end of 2021. That’s good news for anyone interested in buying a home any time soon. It’s also encouraging for current homeowners who may be able to benefit from refinancing. (source)

The share of Americans who say it’s a good time to buy a home rose in October, according to a recent survey from Fannie Mae. The Home Purchase Sentiment Index – which measures Americans feelings about buying and selling homes, mortgage rates, prices, the job market, and their financial situation – found there was a 9 percent month-over-month gain in the number of respondents who say it’s a good time to buy. Similarly, the share of participants who said it’s a good time to sell a house also rose, climbing 6 percent from the month before. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said housing market sentiment has rebounded significantly since the coronavirus pandemic began. “To date, the HPSI has recovered over 60 percent of its COVID-19 pandemic loss, reflecting the bright spot that the mortgage market has been in the economy,” Duncan said. “However, the continuing evolution of the pandemic and the 2020 election outcomes may have longer lasting and unexpected impacts on consumer sentiment, as we saw following the 2016 elections, and we expect both factors will shape the housing market over the coming months.” (source)

Everybody knows about the economic damage the coronavirus pandemic has caused. But while the virus disrupted the overall economy, the housing market has showed remarkable resiliency. In fact, by most measures, it’s outperforming year-before levels. One of those measures is homeowner equity. Homeowners gain equity when their home is worth more than what they owe on it. And, in 2020, it’s been increasing. In fact, ATTOM Data Solutions’ third quarter Home Equity & Underwater Report found that 16.7 million properties could be considered equity rich. That’s about 28 percent of all the mortgaged homes in the country – up from 26.7 percent at the same time in 2019. And the improvement was widespread. Among the 50 states, 49 showed quarterly increases in the number of equity-rich homes. Todd Teta, ATTOM’s chief product officer, says it’s a sign of the housing market’s strength. “Homeowner equity in the third quarter added another pebble to the pile of markers showing that the U.S. housing market continues to defy the broad downturn in the economy this year,” Teta said. “Home prices keep rising, boosting the balance sheets of homeowners throughout most of the country.” (source)

Shopping for a house is easier if there are more homes available for sale. After all, it’s hard to find a place that checks off all the items on your wishlist when there are too few to choose from. That’s why new data from the National Association of Realtors’ consumer website is encouraging for fall home shoppers. According to the data, the number of newly listed homes has shown some improvement. And since overall for-sale inventory is down almost 40 percent from last year, that’s good news. The numbers show new listings were down 7.7 percent in October compared to one year earlier. And while that’s still a significant year-over-year decline, it’s a big improvement from the 13.8 percent they were down in September. Regionally, some areas are doing better than others. The West saw the biggest gain, improving 7.2 percent from the month before. The Northeast also saw an increase, with a 4.1 percent improvement from September. The Midwest and South, however, experienced further declines. Among the nation’s largest metropolitan areas, new listings were down most in Nashville, Charlotte, and Richmond, while making the biggest gains in San Jose, New York, and San Francisco. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, the average mortgage rate for 30-year fixed-rate mortgages with conforming loan balances was virtually unchanged from the week before. However, rates for jumbo loans, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans were all down from the previous week. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says rates continue to hover near record lows. “Mortgage rates continue to hover at record lows this fall. The 30-year fixed mortgage rate remained essentially unchanged … last week, but rates for 15-year fixed-rate loans, FHA loans, and jumbo loans all fell to new MBA survey lows,” Kan said. The drop in rates led to boosted refinance demand, which saw a 6 percent week-over-week increase. Demand for loans to buy homes was down 1 percent from the previous week but remains 25 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. (source)

If you’re a homeowner thinking about selling your house, you’re in luck. Today’s market is good for selling and, according to new numbers from ATTOM Data Solutions, it only got better during the third quarter of this year. In fact, the report found that the typical home sale generated a gain of $85,000 for homeowners. That’s up from $75,000 in the second quarter and $66,000 last year at the same time. The results mean the typical homeowner received a 38.6 percent return on investment compared to the price they paid for their home. Todd Teta, chief product officer at ATTOM, says the housing market continues to thrive despite the economic damage of the pandemic. “Home prices and seller profits across the nation continue racking up new highs as the housing market remains relatively immune from the economic havoc caused by the coronavirus pandemic,” Teta said. “It’s almost as if the housing market and the overall economy are operating in different worlds.” Both the raw-profit and return-on-investment figures are at their highest point since before the housing crash and financial crisis more than a decade ago. (source)

There is a lot of real estate data devoted to tracking buyer demand. Reports covering home sales, contract signings, and builder confidence are all, in one way or another, measuring how many interested buyers are in the market. These reports are worth following, especially for anyone thinking of buying or selling a home. After all, having a general awareness of how many buyers there are can help prospective home shoppers know how much competition to expect when they start looking for a house. And, obviously, someone thinking of selling their home will want to know whether or not there are buyers in the market. That’s why new data looking at the number of showings homes for sale have scheduled is interesting. The report – which looked specifically at showings in September – found that they were up over last year by a significant amount. In fact, showing traffic was up 64.1 percent year-over-year. Regionally, the Northeast saw the biggest increase, with traffic 68.4 percent higher than last year – though the West, Midwest, and South all followed closely behind. Ultimately, the data shows that, despite the pandemic and the end of the summer season, buyers and sellers are still active and the market’s still hot. (source)

Home prices can be deceiving. After all, the sales price of a home isn’t really the number that matters most to a prospective home buyer. The monthly mortgage payment is, and it depends on a number of different factors, including property tax, mortgage rates, the down payment, mortgage insurance, etc. In other words, when thinking about how much house you can afford, it’s best to take everything into consideration, not just the sticker price. That’s why a new analysis is good news for home buyers concerned about affordability. According to the numbers, released by a popular online real estate portal, the typical mortgage payment has become more affordable over the past two years. In fact, homeowners earning the median income could cover the monthly payment on the typical U.S. home in September with 17.5 percent of their earnings. That’s down over two percent from two years ago. That means, despite the fact that home prices have continued to rise, the drop in mortgage rates – which are considerably lower than they were in October 2018 – has helped make mortgage payments more affordable. (source)