Monthly Archives: March 2024

The inventory of homes for sale has been lower than normal for years now. There are a number of reasons for this. One factor keeping inventory low is the number of homeowners who refinanced their loan when mortgage rates were at historic lows and, having locked in a low rate, are reluctant to move. But according to newly released numbers, there may be evidence that the “rate lock” that made potential sellers hesitant to list their homes has begun to ease. How so? Well, new listings of existing homes rose 21 percent in February compared to year-before levels and were up 20 percent from the month before. The improvement is a sign sellers are more active heading into this spring’s sales season. The gains have been significant and widespread. In fact, inventory was up in each of the 50 largest U.S. metro areas, with the strongest increases seen in Texas and Florida. Overall, the inventory of homes for sale is now up 12 percent nationally compared to last year. This is encouraging news and evidence that homeowners may be increasingly willing to make a move. (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 most 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. Mike Fratantoni, MBA’s senior vice president and chief economist, says economic data was behind the improvement. “Mortgage rates dropped … last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” Fratantoni said. Declining rates helped boost demand for mortgage applications, which rose 7.1 percent from the week before. The improvement included a 5 percent increase in demand from home buyers. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Lending standards aren’t fixed. That means qualifying for a mortgage can be easier – or more difficult – depending on when you’re applying for a loan. That’s why the Mortgage Bankers Association keeps a monthly measure of mortgage credit availability. Its Mortgage Credit Availability Index measures whether standards are loosening or tightening on a scale where any increase means it has gotten easier for borrowers to get a loan. According to the most recent index, access to mortgage credit improved in February, though the improvement was small. In fact, the index rose less than 1 percent. Joel Kan, MBA’s vice president and deputy chief economist, says credit remains tighter than usual. “Mortgage credit availability remains quite tight – near the lowest levels in MBA’s survey – even as application volume lags last year’s pace and as the industry continues to reduce capacity,” Kan said. (source)

A new report from ATTOM Data Solutions looks at county-level housing markets across the country in an effort to determine which are the most stable and which face rising risks. The analysis was based on a number of factors including the percentage of homes facing foreclosure, the portion with loan balances that exceeded property values, percentage of local wages necessary to cover homeownership expenses, and local unemployment rates. The results show the country’s most stable markets located primarily in the South and Midwest – with Wisconsin leading the list with nine of the strongest markets. More vulnerable markets were located primarily in the areas around New York City, the Chicago metro area, and inland California. Rob Barber, ATTOM’s CEO, says the housing market remains strong overall. “As always, this is not a warning sign for homeowners to run out and sell, or rush to buy, in any specific market,” Barber said about the results. “The housing market remains strong throughout most of the country despite some recent small downturns.” (source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans which asks for their opinions about the housing market and overall economy. Specifically, respondents are asked whether they think now is a good time to buy or sell a home, whether they think prices and mortgage rates will rise or fall, and about their personal financial situation and job security. The most recent release finds respondents increasingly optimistic. In fact, the index was up two points in February, its third consecutive monthly improvement. It now sits at its highest level in nearly two years. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says respondents are most optimistic about selling. “Consumer attitudes toward home-selling conditions increased markedly in February, with current homeowners, in particular, expressing greater optimism that it’s a ‘good time to sell,’ a development that may foreshadow an upcoming increase in existing home listings,” Duncan said. “Additionally, despite the recent uptick in rates, consumers remain relatively optimistic that mortgage rates will decrease over the next 12 months.” (source)

Everybody with a home to sell wants it to sell for as much as it can. Part of that is presenting it in its best light. That means making small repairs, painting, cleaning, and removing unnecessary clutter before listing it. The other part is selling at the right time. But when is the best time to list your home if you want to get the best possible price? Generally speaking, spring is the time of year when the market heats up and buyers are most active. Year after year, spring sellers are shown to get the best price for their home. In fact, according to one new analysis, sellers who sell during the first two weeks of June are particularly successful among spring home sellers. The analysis found homes sold during early June last year sold for 2.3 percent more than homes sold at any other time. That comes out to about $7,700 more for the typical home. This year’s market is expected to have similar timing, which means now is a good time to start thinking about selling, if you’ve been considering a move. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates for 30-year fixed-rate loans with conforming loan balances saw a slight decline last week from the week before. Rates also fell for 15-year fixed-rate loans, while FHA loans were unchanged and jumbo loans and 5/1 ARMs saw small increases. Steady rates were enough to boost interest in buying a home, though, as demand for mortgage applications spiked 9.7 percent. Mike Fratantoni, MBA’s senior vice president and chief economist, says first-time home buyers were a big part of the increase. “Mortgage applications were up considerably relative to the prior week, which included the President’s Day holiday,” Fratantoni said. “Of note, purchase volume – particularly for FHA loans – was up strongly, again showing how sensitive the first-time home buyer segment is to relatively small changes in the direction of rates.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Spring is typically the time of year when the housing market gets going. This year looks to be no different. In fact, according to a new analysis from the National Association of Realtors’ consumer website, there’s reason for optimism. That’s because the number of homes for sale – which has been one of the primary factors holding buyers back – is rising, and particularly in affordable price ranges. According to the numbers, the inventory of homes for sale on a typical day in February was nearly 15 percent higher than the year before and, for homes between $200,000 and $350,000, inventory was up 20.6 percent. Danielle Hale, the website’s chief economist, says the news has been good so far this year. “The first couple of months of 2024 have proven to be positive for inventory levels, as the number of homes actively for sale was at its highest level since 2020,” Hale said. That’s good news for spring buyers and especially those looking for an affordable home to buy. (source)

Buying a home has gotten more expensive over the past few years. Home prices have climbed and mortgage rates are elevated from the record lows seen during the pandemic. In short, buyers need more money than was necessary just a few years ago. But, according to one new analysis, how much you need to earn in order to comfortably afford a home is largely dependent on where in the country you’re looking to buy. In fact, the necessary household income varies widely. For example, in cities like Pittsburgh, Memphis, and Cleveland, buying remains fairly affordable. Pittsburgh is the most affordable city. In Pittsburgh, a household income of just over $58,000 is needed to afford a home. On the coasts, though, affordability is more challenging. In New York, an income of over $200,000 is needed, while San Jose tops the list at $454,296. Nationally, the income required to comfortably afford the typical home is $106,000. The country’s typical household income is $81,000. (source)

The S&P Case-Shiller Home Price Index is among the most closely followed measures of U.S. home prices. The index, released monthly, tracks all nine census divisions and has data going back almost 30 years. According to the most recent release, prices are still rising. In fact, they continue to move upward at a pace above the historical trend. Brian Luke, head of commodities, real & digital assets at S&P, says recent gains have been solid, especially considering mortgage rate increases. “Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years,” Luke said. “With trend growth at the national level of 4.7 percent, a 5.5 percent return demonstrates solid, steady growth. While we are not experiencing the double-digit gains seen in the previous two years, above-trend growth should be well received considering the rising costs of financing mortgages.” (source)