Monthly Archives: March 2022

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up 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. The increase follows a decline the week before, the first in 12 weeks. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says recent rate fluctuations have been caused by several factors. “Mortgage rates continue to be volatile due to the significant uncertainty regarding Federal Reserve policy and the situation in Ukraine,” Kan said. “Investors are weighing the impacts of rapidly increasing inflation in the U.S. and many other parts of the world against the potential for a slowdown in economic growth due to a renewed bout of supply-chain constraints.” Despite the volatility, though, demand for loans to buy homes was up 1 percent week-over-week. The MBA’s survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Spring is well known as the time of year when the housing market heats up. After waiting out the winter, home buyers return and begin hunting for a home to purchase. Naturally, the increasing number of interested buyers also makes spring a good time for homeowners who want to sell. And this year, home sellers may have even more reason to get ready for spring. According to a recent analysis from the National Association of Realtors’ consumer website, the number of homes available for sale remains historically low, and that could be a big benefit to spring sellers. After all, low inventory means more interested buyers per available listing. But market conditions aren’t fixed. For example, the number of listed homes typically increases almost 20 percent by mid-August. Along with the usual increase in listings, home builders are expected to ramp up construction this year, adding additional inventory to the housing stock. That means, later in the year, inventory may improve, giving buyers more choices and more negotiating power. That’s why homeowners who list this spring may be doing so at the best time this year to sell a home. (source)

Increasing mortgage rates have prospective home buyers concerned about affordability. But while higher rates may have buyers calculating costs, mortgage lenders don’t expect they’ll deter Americans from shopping for a home this year. In fact, according to Fannie Mae’s most recent Mortgage Lender Sentiment Survey, participating lenders expect buyer demand to remain largely stable, despite rising rates. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says there are a number of unknowns that will impact conditions in the months ahead. “Numerous uncertainties, including heightened inflation and the Fed’s monetary policy reaction, which must now also account for the inflationary impact of Russia’s war on Ukraine, suggest increased market volatility, but the general underlying, upward rate trend aligns with lenders’ expectations,” Duncan says. Despite the upward trend, however, the share of lenders expecting purchase demand to grow over the next three months climbed significantly from last quarter, though it remains lower than years past. (source)

It’s said that home is where the heart is, but your home is also a financial investment. That’s why homeowners who are thinking about potential home improvement projects will typically try to calculate what kind of return on investment they’ll get for the upgrade. After all, it’s easier to justify the expense if you know, when it’s time to sell, your home will garner a higher price. These days, though, homeowners have become a little less focused on their financial return and a little more interested in creating joy and purpose in their homes. How so? Well, according to a recent survey, 73 percent of homeowners have invested in a home improvement project since the beginning of the pandemic. That isn’t surprising. Spending more time at home naturally got us thinking about ways we can make our homes more comfortable and functional. But it also got us thinking about how happy we are with our homes. In fact, a majority of survey respondents said they want to feel joyful in their house, and nearly one in three said being happy was a big reason they’d invest in a home improvement project this year. In other words, the pandemic helped make us more focused on, not just improving, but also putting some heart back in our homes. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week for the first time in 12 weeks. 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. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the decline was caused by the invasion of Ukraine. “Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower,” Kan said. “Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other.” Lower rates helped push demand for mortgage applications higher than the week before, with significant increases seen in both refinance and purchase activity. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

What we want in a house doesn’t change all that much over time. Home buyers always want storage, a good kitchen, and enough bedrooms and bathrooms. But according to one new survey, there is a part of the house that has grown in importance over the past couple of years: back yards. In fact, nearly three quarters of Americans said a spacious yard would be at the top of their wish list if they were shopping for a house. So what has home buyers focused on outdoor space more than before? Well, the pandemic was part of it. Having more time to spend at home led us to spend more time in our yards. Among respondents, 24 percent said they’ve been spending more time in their yard than they did before the pandemic and a majority of survey respondents said they’ve enjoyed their yard more than before. Whether we’re using it for relaxation, gardening, dining, or even working, we’ve clearly learned to make better use of our outdoor spaces and it’s made the back yard a vital feature for today’s home buyer. (source)

Just in time for the spring sales season to kick-off, more Americans are saying it’s a good time to buy a house. In fact, according to Fannie Mae’s most recent Home Purchase Sentiment Index – based on a monthly survey which asks Americans for their perceptions of the housing market, buying or selling a home, mortgage rates, home prices, their job and financial situation – respondents are feeling more optimistic about the market. Specifically, the component measuring whether participants think it’s a good time to buy a house rose 4 percent from the month before. But whether it’s a sign of spring or prospective buyers feeling like they need to get ahead of any upcoming rate increases is difficult to say. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says respondents are definitely expecting higher rates. “A survey-record share of consumers – particularly homeowners and higher-income individuals – expect mortgage rates to increase in the next 12 months, likely owing to signals that the Fed will raise rates to slow the pace of inflation,” Duncan said. Still, the increase in buyer sentiment is a welcome change after several months of declines. (source)

You don’t need to be an economist to understand supply and demand. It’s a pretty simple concept. When supply is low and demand is high, prices rise. That’s what’s been happening in the housing market. Home prices have been increasing because a lot of people want to buy a house but there aren’t a lot of homes available to buy. Fortunately, though, there’s reason to believe the inventory crunch that’s pushed prices higher may be starting to ease. According to a new report from the National Association of Realtors’ consumer website, the number of active listings – while still low – has showed improvement. In February, listings were 25 percent lower than one year earlier. That’s down from 28.4 percent in January. Additionally, the last two weeks of February saw more new home sellers enter the market than during the same period in 2021. In fact, the final week of the month saw new listings rise 2.1 percent over year-before numbers. While the gains may seem small, they’re an encouraging sign for buyers, since the number of listings will likely grow as the spring sales season gets underway. (source)

Figuring out how much your down payment will be and where it’ll come from is a big part of getting ready to buy a house. Whether you’re using money from the sale of your current home or saving from scratch, you have to have an idea of how much you’ll have available. Naturally, how much you’ll need depends on the specific house you’re hoping to buy and the terms of your loan. But what does the typical down payment look like these days? Well, according to one recent analysis, the median down payment on single-family homes purchased in the fourth quarter of last year was $26,000. That’s up from the previous year, when it was $21,891, but actually 1 percent lower than in the third quarter. Whatever the case, buyers should know they have options. Though widely recommended, a 20 percent down payment isn’t required. In fact, most home buyers put down less. Last year, for example, the typical down payment for first-time buyers was 7 percent, while repeat buyers averaged a down payment of 17 percent. (source)