Monthly Archives: September 2022

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. Rates were up 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. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says rates are reacting to uncertainty. “The spread between the conforming 30-year fixed mortgage rate and both ARM and jumbo loans remained wide last week, at 118 and 45 basis points, respectively,” Kan said. “The wide spread underscores the volatility in capital markets due to uncertainty about the Fed’s next policy moves.” Despite higher rates, though, demand for home purchase loans was relatively unchanged last week, moving 0.2 percent higher from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Conditions are better for buyers when there are more homes for sale. That’s why it’s good news that active listings are finally moving higher after years of being historically low. According to one recent analysis, the number of active listings available on a typical day in August was 26.6 percent higher than it was at the same time last year. That’s a little less than the previous month when active listings were 30.7 percent higher year-over-year. Still, the fact that listings continue to grow at a near-record pace is undoubtedly good for buyers. Danielle Hale, chief economist for the National Association of Realtors’ consumer website, says the market is finding better balance. “As we soak up the last days of summer, the housing market is beginning to find more balance between buyer-friendliness and still favorable selling conditions,” Hale said. “For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce.” (source)

The housing market has slowed down this year. Mortgage rates increased from record lows, buyer demand calmed, and home price increases have begun to moderate. But while market conditions have definitely shifted, it’s still a good time to be a homeowner. In fact, according to one recent analysis, homeowners continued to gain near-record equity during the second quarter of this year. The numbers – from CoreLogic’s Homeowner Equity Insights report – show average homeowner equity increased $60,000 from last year at the same time. Selma Hepp, interim lead of the office of the chief economist, says the gains put homeowners in good position. “For many households, home equity is the only source of wealth creation,” Hepp said. “As a result, recent record gains in equity and record declines in loan-to-value ratios will provide many owners with a financial buffer in case economic conditions worsen. In addition, record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.” (source)

You can tell a lot about home buyers by what – and where – home builders are building homes. Their business depends on giving buyers what they want. So the homes they’re building are a good reflection of what’s popular with today’s buyers. For that reason, the National Association of Home Builders recently looked at the past two and a half years of home building activity. Their Home Building Geography Index offers insight into where buyers want to live. What it found was a shift away from large, metro areas toward lower-density markets in the outer suburbs. Robert Dietz, NAHB’s chief economist, says there are several reasons for the shift. “This shift was first caused by the initial impact of Covid on housing demand, which favored lower density neighborhoods,” Dietz says. “The shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote and office work.” Whatever the reason, the data is clear. The index shows the market share for single-family home building in large metros and inner suburbs fell about 3 percent over the past two years, while building in the outer suburbs was up almost 2 percent. (source)

Each month, Fannie Mae asks Americans how they feel about the housing market, mortgage rates, prices, and whether it’s a good time to buy or sell a home. Their monthly survey is a good gauge of what’s happening in today’s market and what’s ahead for buyers and sellers. In August, survey results were mixed. For example, the number of respondents who said it’s a good time to buy a house improved from July, rising 8 percent month-over-month. But while buying sentiment improved, it was balanced by a decline in the number of participants who said it’s a good time to sell. Survey respondents also said they think mortgage rates will fall over the next 12 months but were split over what will happen to home prices. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the change in price expectations was significant. “The share of consumers expecting home prices to go down over the next year increased substantially in August,” Duncan said. “We also observed a large decline in consumers reporting high home prices as the primary reason for it being a good time to sell a home, suggesting that expectations of slowing or declining home prices have begun to negatively affect selling sentiment.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. 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 increases brought rates to their highest level since mid-June. But despite higher rates, Mike Fratantoni, MBA’s senior vice president and chief economist, says he expects buyer activity to rebound. “Recent economic data will likely prevent any significant decline in mortgage rates in the near term, but the strong job market depicted in the August data should support housing demand,” Fratantoni says. “There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity.” Last week, demand for loans to buy homes fell 1 percent from the week before. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Home sales are a good way to measure how many buyers are active in the housing market. But home sales only count the buyers who’ve found a home and closed the sale. They don’t measure the buyers who are looking but haven’t yet found a home to purchase. That’s why a recent analysis of how many scheduled showings the typical listing receives is an interesting look at where the housing market is right now. Showings can provide an even more accurate snapshot of how much buyer interest exists since they also cover the buyers who looked but didn’t buy. According to the numbers, scheduled showings have fallen from last year. In fact, showing activity was down almost 17 percent in July, with only one metro area averaging double-digit showings per listing. Last year at this time, there were 40 cities with double-digit averages. The drop in demand is significant but expected. It’s further evidence that the housing market continues to normalize after years of imbalance – when the number of buyers far outpaced the number of available homes. Naturally, with inventory improving and buyer demand cooling, the market is becoming better balanced, which means less stress and competition for home buyers looking for a house to buy this fall. (source)

When homes are selling quickly, home buyers need to be prepared. If they aren’t, they risk losing a home they’re interested in to a better prepared buyer who got to it first. That was a common occurrence during the frenzied days of last year’s housing market. A good home for sale could be off the market in a matter of days, which meant buyers needed to be ready to act fast. Fortunately, the market has calmed down since then. In fact, according to one new analysis, the number of days homes typically spend on the market just improved for the first time in two years. The data, from the National Association of Realtors’ consumer website, shows homes for sale now typically spend five more days on market than they did last year at the same time. That’s the first improvement since June 2020. But while that’s undoubtedly good news for prospective home buyers, it doesn’t mean they can take too much time. The typical home still sells 22 days faster than it did between 2017 and 2019. (source)

Home prices shot upward over the past two years. Driven by a historically low number of homes for sale and growing demand from buyers, prices surged. This year, though, the housing market has slowed. So, naturally, the price spikes have too. Right? Well there’s good and bad news for prospective home buyers. First off, the price surge is likely over. Higher mortgage rates have calmed demand from buyers and allowed the number of homes for sale to increase. That’s helped slow prices, which have already begun to show signs of deceleration. But according to the most recent S&P Case-Shiller Home Price Indices, price increases – while slower than before – are still pretty substantial. Craig J. Lazzara, managing director at S&P, says this year’s increases continue to outpace the typical year. “It’s important to bear in mind that deceleration and decline are two entirely different things, and that prices are still rising at a robust clip,” Lazzara said. “For the first six months of 2022, in fact, the National Composite is up 10.6 percent. In the last 35 years, only four complete years have witnessed increases that large.” But while prices are still up significantly so far this year, they’re expected to continue to decelerate through the end of 2022. (source)

According to the Mortgage Bankers Association’s Weekly Applications survey, average mortgage rates increased again last week, with rates climbing 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. It was the second consecutive week rates moved higher. The increases played a role in slowing demand for home purchase loans. In fact, demand for loans to buy homes was down 2 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says demand is down right now but may pick back up soon. “Purchase applications have declined in eight of the last nine weeks, as demand continues to shrink due to higher rates and a weaker economic outlook,” Kan said. “However, rising inventories and slower home-price growth could potentially bring some buyers back into the market later this year.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)