Monthly Archives: August 2021

For most of us, buying a house means applying for a loan. After all, homes are expensive, so you’re probably going to need to finance your purchase. But the standards used to determine the terms of that loan, or whether or not you’re approved to borrow at all, aren’t fixed. There are times when your financial situation needs to be in better shape than others in order to qualify for a loan. That’s why the Mortgage Bankers Association takes a monthly measure of mortgage credit availability. When lending standards tighten, their Mortgage Credit Availability Index drops. When they loosen, it rises. In July, it was up 0.3 percent over the month before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says jumbo loan programs saw the most improvement. “Credit availability slightly increased in July, driven by an increase in jumbo loan programs,” Kan said. “The bounce back in jumbo credit availability followed a sharp drop in June, as some investors renewed their interest in jumbo ARM loans for cash-out refinances and investment homes.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications rose 2.8 percent last week from one week earlier. The improvement included a 3 percent increase in refinance activity and a 2 percent gain in the number of buyers looking for loans to buy homes. Joel Kan, MBA’s vice president of economic and industry forecasting, says there are signs that first-time buyers are having more luck in the market. “The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3 percent increase in FHA loans,” Kan said. “With low for-sale inventory keeping home-price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices.” Also in the report, rates saw slight increases last week, except for loans backed by the Federal Housing Administration which fell. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

There are more home buyers looking for an affordable home than there are affordable homes to buy. That’s been true for awhile now. It’s part of the reason home prices keep rising. But while inventory is still down significantly from last year, the number of new listings has begun to improve. And, according to new numbers from the National Association of Realtors’ consumer website, the number of available smaller homes is now climbing faster than other categories. In fact, the share of homes between 750 and 1,750 square feet rose from 30.2 percent in July 2020 to 36.3 percent in July 2021. By comparison, the share of homes between 3,000 and 6,000 square feet has fallen 4.1 percent during the same period. Overall, new listings are up 6.5 percent over last year. Danielle Hale, the website’s chief economist, says the trend is good for buyers. “This is shifting the housing market balance in a more buyer-friendly direction, but buyers may not see as much price moderation as suggested by the national trend because it’s partly attributed to a shift toward smaller homes for sale,” Hale said. (source)

Fannie Mae’s Home Purchase Sentiment Index is a monthly measure of how Americans feel about the housing market, economy, and their own personal financial situation. The survey asks participants whether they feel now is a good time to buy or sell a home, whether they think mortgage rates and prices will go up or down over the next year, and how they feel about their job and income. In July, the index saw a slight decline. Among respondents, fewer said they thought it was a good time to buy a home, while the number who think it’s a good time to sell remains high. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says home prices are the reason behind both responses. “The percentage of respondents citing high home prices as the top reason for it being a ‘bad time to buy’ also reached an all-time high,” Duncan said. “On the flip side, selling sentiment remains extremely high, and well above pre-pandemic levels, for the same commonly cited reason: high home prices.” (source)

Homes sell quickly these days. Anyone who’s shopped for a house recently knows this. A quality house listed on a Thursday will sometimes not even last through the weekend. That’s good for home sellers but can be stressful for buyers. Which is why new numbers tracking home sales over the four-week period ending August 1 offer encouragement. The data shows that 49.7 percent of homes had an accepted offer within two weeks of being listed. And while that’s fast – and nearly 6 percent higher than the same time last year – it’s also about the same as it’s been since early July. In other words, homes are still selling quickly but the rate has begun to plateau. That could be a sign that the red-hot housing market is beginning to cool, heading into the second half of summer. And, if the trend continues, it may mean home buyers find more available homes for sale and a little less competition than they did earlier in the year. (source)

When the pandemic began in early 2020, there were fears that it would hurt the housing market and home values. However, those fears were quickly set aside as home buyers returned and prices rose. In short, the housing market survived relatively unscathed as the coronavirus caused volatility and uncertainty nearly everywhere else. Now, more than a year later, a new report shows that it continues to thrive. In fact, according to ATTOM Data Solutions’ U.S. Home Equity & Underwater Report, the number of equity-rich properties – those whose loans are no more than 50 percent of the property’s estimated value – continues to rise, while the number of seriously underwater homes is falling. Todd Teta, ATTOM’s chief product officer, says the pandemic has actually helped homeowners. “Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country,” Teta said. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were down last week for both 30-year fixed-rate mortgages with conforming loan balances and 15-year fixed-rate loans. Loans backed by the Federal Housing Administration and jumbo loans both saw increases. Mike Fratantoni, MBA’s senior vice president and chief economist, says coronavirus concerns pushed rates lower. “Interest rates drifted lower globally last week, as markets assessed the latest concerns regarding the delta variant,” Fratantoni said. But despite favorable mortgage rates, application demand was down week-over-week. In fact, both the refinance and purchase index saw 2 percent declines from the week before. Fratantoni says the drop in purchase-application demand is likely being driven by a lack of available homes for sale. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Buying a house is not something we do very often. Studies show the average American only buys a home three times in their entire life. So it’d make sense that the share of Americans planning to buy at any given time would stay fairly consistent and relatively low. But new numbers from the National Association of Home Builders show buyer demand is actually rising, and quickly. The data – from the NAHB’s most recent Housing Trends Report – found the share of Americans planning to buy in the next 12 months is higher than it’s been in over two years. It’s also nearly twice what it was at the beginning of 2020. In fact, among surveyed adults, 17 percent said they’re planning to buy within the next year, which is a significant jump from 10 percent during the first quarter of 2020. But what’s driving the increases? Well, according to the report, it’s mostly younger Americans – with the biggest gains in buyer interest coming from millennials. (source)

If you’re a homeowner who is thinking about making a move, ATTOM Data Solution’s most recent U.S. Home Sales Report has good news for you. That’s because the report – which looks at how much profit the typical home sale generated during the second quarter of this year – found that home sellers are seeing bigger profits than they did at the beginning of the year – and significantly more than at the same time last year. In fact, during the second quarter, the typical home sale generated a profit of $94,500. That’s up from $90,000 during the first quarter and $60,572 during the second quarter of 2020. In short, it’s a good time to sell a home. But while home seller profits are up, return on investment saw a slight decline. Todd Teta, ATTOM’s chief product officer, says it may be a sign that the market is finally starting to cool. “While it may just be a momentary thing in today’s volatile market, it’s definitely something to keep an eye on in case it’s a sign that the market is finally cooling or giving in to some of the economic forces connected to the virus pandemic,” Teta said. (source)

The number of contracts to buy homes signed in June fell 1.9 percent from the month before, according to new numbers from the National Association of Realtors. In May, they were up 8 percent month-over-month. The dramatic swing continues an up-and-down trend pending sales have followed since the start of the year. Lawrence Yun, NAR’s chief economist, says the volatility is due, in part, to rising home prices. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat,” Yun said. But while home prices are rising everywhere, contract signings are doing better in some regions than others. In fact, last month, pending sales were up in the Northeast and Midwest and down in the South and West. “The Midwest region offers the most affordable costs for a home and hence that region has seen better sales activity compared to other areas in recent months,” Yun explained. (source)