Monthly Archives: September 2023

Access to credit isn’t fixed. There are times when it’s easier for a borrower to get approved for a loan and times when it’s more difficult. That’s why the Mortgage Bankers Association keeps a monthly measure of mortgage credit availability. Its Mortgage Credit Availability Index measures whether or not lending standards are loosening or tightening. If the index increases, it means standards have loosened, making it easier for borrowers to secure financing. If it decreases, standards have tightened and borrowers will have to be better financially prepared if they hope to be approved for a loan. In August, the index saw a slight increase, rising 0.3 percent from the month before. According to Joel Kan, MBA’s vice president and chief economist, the improvement was driven by an increase in loan programs. “The overall increase was driven by an increased number of loan programs that included parameters such as cash-out refinances and mid-range credit scores,” Kan said. It was also driven by gains in the component measuring jumbo loans. The jumbo MCAI was up 2.7 percent over the month before. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes increased last week from one week earlier. The 1 percent improvement was slight but welcome, as it came during a week when rates moved higher. Joel Kan, MBA’s vice president and deputy chief economist, says overall demand is muted. “Purchase applications increased over the week despite the increase in rates, pushed higher by a 2 percent gain in conventional loans,” Kan said. “Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate.” Overall, demand for mortgage applications was down 0.8 percent week-over-week. Rates, on the other hand, 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, 15-year fixed-rate loans, and 5/1 ARMs. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Temperatures rise in the summer then start to fall as autumn approaches. The housing market follows a similar pattern. The number of home buyers active in the market starts to climb in spring and peaks sometime in early summer. By September, things are typically beginning to cool off, as buyer activity slows. That, however, doesn’t mean it isn’t a good time to shop for a house. In fact, according to one new analysis, home buyers may find improving conditions as we head into fall, making it an ideal time to be looking to buy. Why? Well, for one, fewer buyers in the market means less competition for available homes, at a time when inventory is low. That’ll give active buyers a little more breathing room and time to make decisions. It’ll also mean price increases begin to moderate. They already have. In fact, the typical home value rose just 0.2 percent from July to August. Combined with the fact that new listings are rising – at a time of year they usually fall – slower prices and less competition could add up to an opportunity for buyers gearing up to shop houses this fall. (source)

The internet has made it easier for potential home buyers to get a feel for what homes are on the market and in their price range. But while looking at listings online is a helpful resource, nothing beats seeing a house in person. Scheduling a showing is typically the next step for buyers interested in a house for sale. It allows them to get a closer look at the home’s condition, its layout, and it’s potential. Showings are a great way for buyers to determine whether or not they want to make an offer on a house. They’re also a reliable gauge of how much buyer interest there currently is in the market. After all, the more scheduled showings, the more interested buyers. And according to one recent analysis, buyer interest – and showings – are up this summer. In fact, showing activity, as of July, was up in every region across the country. In the Midwest and Northeast, showings saw a more than 20 percent year-over-year gain, while the South saw an 8 percent increase and the West was up 5.5 percent. (source)

Americans’ view of the housing market has plateaued, according to the latest results of Fannie Mae’s Home Purchase Sentiment Index. The monthly index is based on a survey that asks participants for their feelings about buying and selling a home, their financial situation and job, and where they think prices and mortgage rates are headed. In August, the index was unchanged from one month earlier. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says market sentiment is divided between buyers and sellers. “From a historical perspective, the current housing market is unusual, as demonstrated in part by the HPSI and its recent plateauing,” Duncan said. “Given the significant home price appreciation and rapid rise in mortgage rates, it is very much a tale of two markets, at least from a consumer perspective.” In other words, the market is good for sellers while, at the same time, challenging for home buyers. Survey results reflect that reality. In fact, the number of respondents who say now is a good time to buy a home remains low but the share of respondents who say it’s a good time to sell increased in August, rising to 66 percent. (source)

ATTOM Data Solutions’ recently released second-quarter 2023 U.S. Residential Property Mortgage Origination Report shows the total number of residential mortgages secured during the second quarter increased 21 percent from the first quarter. The quarter-over-quarter increase – which includes purchase, refinance, and home-equity lending – was the first in two years. The improvement was led by purchase loans, which made up about half of all mortgages issued, with refinance packages making up a third and home-equity loans just under 20 percent. Rob Barber, ATTOM’s CEO, says the data shows the housing market’s continued strength. “Lenders certainly aren’t anywhere near as busy as they were back in 2021,” Barber said. “And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country.” Increases in residential mortgages were seen in 95 percent of the country, marking the first gains following eight consecutive quarterly declines. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. 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, 15-year fixed-rate loans, and 5/1 ARMs. The drop wasn’t enough to boost demand for mortgage applications, though. Joel Kan, MBA’s vice president and deputy chief economist, says purchase and refinance activity were both down last week. “Both purchase and refinance applications fell … as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” Kan said. “The 30-year fixed mortgage rate decreased … but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Options are important for home buyers. If you’re looking for a house to buy, having many homes to choose from is ideal for a couple of reasons. First, it raises the odds you’ll find one that fits your needs and checks the boxes on your wishlist. Secondly, a better balanced market, where the number of buyers and available homes are closely matched, means stable prices and less competition. In other words, an increasing number of homes for sale is good for home buyers – especially in a market low on homes. That’s the case today. The inventory of homes actively for sale is currently down 30-to-60 percent from pre-pandemic levels. But fortunately for prospective home buyers, one new analysis found the number of newly listed homes for sale saw a summer bump, climbing 3.5 percent from July to August. That’s an encouraging step in the right direction. It also puts new listings just 7.5 percent lower year-over-year, after being down 20.8 percent in July. (source)

Nationally, home prices rose nearly 5 percent during the first half of 2023, according to new numbers from the S&P Case-Shiller Home Price Index. That’s a far smaller increase than has been seen over the past few years but is still faster than the historical median full-year increase. In other words, home prices are still rising, not as fast as they were in 2021, but faster than typical. Craig J. Lazzara, managing director at S&P, says the outlook is optimistic. “With 2023 half over, the National Composite has risen 4.7 percent, which is slightly above the median full calendar year increase in more than 35 years of data,” Lazzara said. “We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results.” S&P’s price index is considered among the leading measures of U.S. home prices and has been tracking home values for more than 35 years. (source)

After a contract to buy a home is signed, that home’s sale is considered pending until it closes weeks later. Because signings precede closings by several weeks, they are considered a reliable indicator of future home sales. That’s why the National Association of Realtors tracks them each month. In July, the NAR’s Pending Home Sales Index found contract signings up 0.9 percent from the month before. It was the second consecutive month of gains. Lawrence Yun, NAR’s chief economist, says the improvement is a sign that buyer demand remains strong, despite current market challenges. “The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” Yun said. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.” (source)