Monthly Archives: November 2023

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. It was the fourth decline in five weeks. Rates fell across most loan categories, including 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 5/1 ARMs and 15-year fixed-rate loans. Joel Kan, MBA’s vice president and deputy chief economist, says rates are now at a 10-week low. “Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed-rate dipping to … the lowest level in 10 weeks,” Kan said. “Rates have declined more than 50 basis points over the past six weeks, which has helped spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago.” Last week, demand for loans to buy homes was up 5 percent week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Fannie Mae’s Economic and Strategic Research Group releases a monthly outlook covering what the group believes is ahead for the economy and housing market. According to their most recent forecast, they see some improvement ahead for home buyers. In fact, the ESR group says they believe home sales will bottom out early next year before starting to climb again. The reason behind the rebound? Lower mortgage rates. “Housing has been and continues to be under serious affordability pressure, resulting in recessionary-level home sales activity,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said. “While many current owners with low mortgage rates will likely continue to be discouraged from listing their homes, we expect mortgage rates to trend modestly downward in 2024, which should help kickstart a gradual recovery in homes sales into 2024.” Fannie Mae also sees the new home market – both construction and sales – remaining resilient into the new year. (source)

The S&P Case-Shiller Indices are considered among the leading measures of U.S. home prices. The indices cover all nine census divisions and have been keeping records for more than 30 years. According to their most recent release, S&P remains optimistic about home values. Results show prices have continued to rise since bottoming out in January. In fact, Craig J. Lazzara, managing director at S&P, says home prices have outpaced the typical annual increase. “On a year-to-date basis, the National Composite has risen 5.8 percent, which is well above the median full calendar year increase in more than 35 years of data.” Lazzara said. “Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.” Though prices remain strong, regional differences persist, with the Midwest and Northeast remaining the nation’s strongest regions while the West and Southwest have seen weaker prices this year. (source)

There aren’t as many homes for sale as there used to be. In fact, the inventory of previously owned homes available for sale has seen double-digit decreases over the past few years. That’s produced some challenges for today’s home buyer. It’s also produced opportunities for builders, as more buyers turn to the new home market to find a home that fits their needs. In fact, new home construction – which is considered a good indicator of housing market health – has been increasing lately. It did again in October. New numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show housing starts up 1.9 percent from September and permits to build new homes at the highest level in nearly a year and a half. The October improvements came as mortgage rates were increasing and builders were feeling less optimistic about the market. However, since then, rates have begun to fall. If that trend continues, it could mean more gains for new home construction as we approach spring 2024. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell to a two-month low last week. Rates were down from the week before 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 vice president and deputy chief economist, says economic data influenced the decline. “U.S. bond yields continued to move lower as incoming data signaled a softer economy and more signs of cooling inflation,” Kan said. “Most mortgage rates in our survey decreased, with the 30-year fixed mortgage rate decreasing … to the lowest rate in two months.” As a result, demand for mortgage applications rose to its highest level in six weeks, with applications for loans to buy homes up 4 percent 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)

Sales of previously owned homes fell 4.1 percent in October from one month earlier, according to new numbers from the National Association of Realtors. The decline came amid rising mortgage rates, low for-sale inventory, and seasonal trends which typically slow sales after the hot summer market begins to cool. But while home sales were slower in October, Lawrence Yun, NAR’s chief economist, says conditions may improve in the months ahead. “Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” Yun said. “Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales.” It’ll also help slow down competition and fast sales. In October, the vast majority of homes still sold in less than a month, with the typical property only remaining on the market for 23 days. (source)

We all know location matters when buying a home. Everything from prices to the amount of competition you face will be different from one zip code to the next. Proof of this can be found in a study of the country’s most affluent areas. The analysis looked at the 100 most exclusive zip codes across the country and found the market for high-end homes is still running hot, even as the housing market overall seems to be cooling. For example, in 23 of the most expensive markets, more than half of properties sold were sold above asking price, with at least one zip code seeing 96 percent of homes go above asking. High-end homes are also selling quickly. In eight of the 100 markets, homes sold in less than a week despite median prices in those areas reaching $4.4 million. Additionally, half of the country’s most affluent areas saw homes sell faster than they did last year at the same time. The reason for the increased competition? Inventory. The market for high-end homes has heated up due to the lack of available properties for sale. (source)

The National Association of Home Builders keeps a monthly measure of how builders view the market for newly built homes. Its Housing Market Index is based on a survey which scores builders’ answers on a scale where any number above 50 indicates more builders view conditions as good than poor. In November, the index fell six points to 34, as rising mortgage rates dampened builder confidence. But Robert Dietz, NAHB’s chief economist, says there are signs that conditions may soon improve. “While builder sentiment was down again in November, recent macroeconomic data point to improving conditions for home construction in the coming months,” Dietz said. “In particular, the 10-year Treasury rate moved back to 4.5 percent for the first time since late September, which will help bring mortgage rates [down].” In the meantime, a rising number of builders say they’ve reduced prices in an effort to entice buyers. Additionally, 60 percent of builders say they’re providing sales incentives. (source)

The standards lenders use to determine whether or not a borrower is eligible for a mortgage aren’t fixed. That means getting approved for a mortgage can be more difficult at times and easier at others. It also means prospective home buyers can better prepare themselves if they have an idea whether standards are loosening or tightening. The Mortgage Bankers Association tracks mortgage credit availability each month with its Mortgage Credit Availability Index. Any increase in the index means credit has become more available, either because of an increase in loan offerings or a loosening of standards. In October, the index showed a 1 percent increase from the month before. Joel Kan, MBA’s vice president and chief economist, says the improvement was mostly in the market for larger loans. “Mortgage credit availability rose in October, but the growth was driven by increased activity in the jumbo market,” Kan said. “The jumbo index increased by 2.7 percent to the highest level in 14 months – its third straight monthly increase.” Credit availability overall remains tighter than it has been in recent years, as loan offerings have narrowed due to lower demand. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates were mostly flat last week from one week earlier. Rates for 30-year fixed-rate loans with conforming loan balances and loans backed by the Federal Housing Administration were both unchanged week-over-week, while jumbo loans and 5/1 ARMs saw slight increases. Joel Kan, MBA’s vice president and deputy chief economist, says rates have fallen over the past few weeks. “Although Treasury rates dipped midweek, mortgage rates were little changed on average through the week,” Kan said. “The 30-year fixed mortgage rate remained … about 30 basis points lower than three weeks ago.” As a result, demand for loan applications rose to the highest weekly pace in five weeks, though it remains at a low level overall. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)