Monthly Archives: November 2021

By now, anyone interested in buying a house knows home prices have been rising. Climbing prices have been a factor for home buyers for years, and especially over the past 12 months. But while home prices have risen, that doesn’t necessarily mean you can’t find a home that’s affordable. It might actually be more possible than you think. For example, according to the National Association of Home Builders’ most recent Housing Opportunity Index – which measures how affordable buying a home is for families earning the U.S. median income – 56.6 percent of homes sold between the beginning of July and the end of September were considered affordable. That’s the good news. The bad news is affordability is at a lower level than it’s been in recent years. And, according to NAHB chairman, Chuck Fowke, the challenges home builders are facing have made it difficult to build the new homes that could help provide more affordable options for buyers. “Persistent building material supply chain bottlenecks and tariffs on Canadian lumber and Chinese steel and aluminum continue to place upward pressure on construction costs and home prices,” Fowke said. “Policymakers must fix supply chain vulnerabilities that are disrupting and delaying construction projects and hurting housing affordability.” (source)

New numbers from ATTOM Data Solutions show that 39.5 percent of mortgaged residential properties were considered equity rich during the third quarter. That’s up from 28.3 percent last year at the same time. So what does equity rich mean? Well, according to ATTOM’s U.S. Home Equity & Underwater Report, it means the amount of loan balances secured by those properties was no more than 50 percent of the home’s estimated market value. In other words, a large percentage of homeowners are seeing a big benefit to their bottom line as their home’s value continues to grow. But it isn’t just long-time homeowners who are benefiting. With national home values up 16 percent year over year, even recent buyers have begun to see gains. Todd Teta, ATTOM’s chief product officer, says the improvements have been the best in years. “Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow as soaring home prices pushed their equity levels even higher,” Teta said. “Amid the best gains in two years, nearly four of every 10 owners found themselves in equity-rich territory.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. 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 helped push demand for loan applications higher week over week. In fact, refinance activity moved up 7 percent and the purchase index was up 3 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says buyers returned to the market, but conditions remain challenging. “Purchase applications were also strong last week, increasing just under 3 percent and down only 4 percent from last year’s pace,” Kan said. “The dip in rates might have helped to bring some buyers back into the market, but housing inventory is still extremely low and price growth remains elevated.” Overall, mortgage application demand was up 5.5 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Everyone, from time to time, dreams of moving somewhere new. Whether the dream is to move to a nicer house in the same area, out of state, or somewhere even more exotic, the dream is always exciting. Reality, however, is something different. Buying and selling a house, packing up all of your belongings, and moving is a lot of work and it can get stressful at times. But, if you’re someone who’s feeling overwhelmed at the prospect of an upcoming move, there’s reason to be optimistic. In fact, according to a new survey, there’s very little chance you won’t come out on the other end happy that you did it. The survey – which asked Americans who recently relocated how happy they are since their move – found that the vast majority of them said they feel happier. Among respondents, 54 percent said they were much happier, while 29 percent said they feel a little bit happier. That leaves just 17 percent who either felt no different or less happy – with only 3 percent saying they were much less happy than before their move. (source)

For nearly a year and a half now, Fannie Mae’s Home Purchase Sentiment Index – which measures Americans’ perception of the housing market – has remained within the same general range. That’s not too surprising. After all, market conditions have been fairly consistent, following some initial volatility after the pandemic began in March 2020. Since then, a combination of low inventory and high buyer demand has been driving prices higher, while mortgage rates continue to hover just above all-time lows. That remains true today, which is why there’s been little movement in the HPSI in recent months. However, October’s results do show a slight improvement in the number of Americans who say they think now is a good time to buy or sell a home. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says consumers have some concerns about the economy but it isn’t likely to affect home buying activity. “While economic uncertainty could potentially dampen mortgage demand over the longer term, we believe current market conditions remain conducive to home purchase activity, as demand for homes continues to far outstrip the supply available for sale,” Duncan said. (source)

Temperature isn’t the only thing that falls when the seasons change. If you follow the housing market, you know that the number of active buyers and available listings also begin to fall. It makes sense. The school year, the approaching holidays, and colder weather all have an effect on our willingness to buy or sell a home. And while this year’s market has been hotter than normal, that doesn’t mean we won’t see the same seasonal trends as we head into winter. According to one recent report, it may already be happening. In fact, the report shows that the number of homes for sale dropped in October across every price segment. But while that may be true, the price range you’re in will determine how many options you’ll find, if you’re house hunting this fall. For example, the number of available homes for sale under $200,000 has fallen 18.1 percent in the past year, while homes between $200,000 and $400,000 are down less than 1 percent. And as your price range rises, so do the number of listings. Year-over-year, homes between $400,000 and $600,000 are actually up, increasing 31.2 percent over the past 12 months. Similarly, homes between $600,000 and $1,000,000 rose 48.3 percent. (source)

Unless you’re a real-estate investor, your primary focus when buying or selling a home shouldn’t be profit. Your home, after all, is more than a mere investment. It’s where you spend your life. But while your motivation may not be money, new numbers from ATTOM Data Solutions show that it could be a nice side benefit. Their third-quarter 2021 U.S. Home Sales Report found that the typical home sold this summer generated a profit of $100,178. That’s up from $88,800 in the second quarter and $69,000 at the same time last year. In short, the market was hot. So hot, in fact, that median home prices rose year-over-year in 93 percent of metros with enough data to analyze. Todd Teta, ATTOM’s chief product officer, says the gains are nothing new. “The third quarter of this year marked another period in a banner year for a housing market boom that’s steaming ahead through its 10^th year,” Teta said. “Prices and seller profits again hit new highs since the market started coming back from the Great Recession in 2012.” According to Teta, though there have been signs of a possible slowdown in recent months, housing market gains look poised to continue for the foreseeable future. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week for the first time since August. 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. But despite declining rates, demand for mortgage loan applications fell 3.3 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said rates fell later in the week, which may explain why demand declined despite the drop. “Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed Treasury yields lower,” Kan said. “Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

When you buy most things, you only have to consider their price. Buying a home is different. Whether or not a home is affordable depends on a number of factors beyond the list price. Mortgage rates, for example. The mortgage rate you lock in when you purchase your home helps determine how much your monthly payment will be. Which means, it’s important for home buyers to know where rates are and where they may be headed. In recent years, rates have been low. How low? Well, by historical standards, very low. According to Freddie Mac, rates in the 1970s ranged between 7 and 9 percent, before skyrocketing in the early 1980s, when they reached as high as 18 percent. And even though they calmed down in the 1990s and 2000s, they didn’t fall below 5 percent until 2009, following the financial crisis and housing crash. Since then, rates have remained low. In fact, rates over the past few years have been lower than they’ve been at any point in the past 40 years – which is great news for anyone looking to refinance their loan or purchase a home. (source)

For a number of reasons, the coronavirus pandemic caused many Americans to rethink their living situation. Remote work and more time at home meant many of us began thinking about moving somewhere new, further from city centers where we could have more space for less money. But now, more than a year and a half later, the surging interest in moving metros looks like it’s starting to wane. In fact, according to newly released data, 30.2 percent of prospective buyers looked at homes in a new area during the third quarter. That’s down from 31.1 percent in the second quarter. It was the second-straight quarter interest in relocation dropped following a year’s worth of increases. But while it has begun to decline, it’s still higher than pre-pandemic numbers. And because flexible-work policies continue to give workers more options, it’s unlikely to fall back to where it was before the pandemic’s onset. So where are the most popular locations for buyers who are looking for a change? Well, the numbers show Miami, Phoenix, Sacramento, Las Vegas, and Tampa were the most popular areas for migrating Americans. (source)