Monthly Archives: August 2024

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down for 30-year fixed-rate loans with conforming loan balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. Jumbo loans saw a slight increase. Joel Kan, MBA’s vice president and deputy chief economist, says it was the fourth consecutive week of declines. “Mortgage rates declined for the fourth consecutive week, with the 30-year fixed rate at … the lowest since April 2023,” Kan said. “Rates have now come down more than 80 basis points from a year ago.” But despite more favorable rates, demand for mortgage applications was relatively flat last week, with the Market Composite Index – which measures both purchase and refinance activity – up just 0.5 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)

Home prices are still rising, according to the latest numbers from the S&P Case-Shiller Home Price Indices. S&P’s National Home Price Index – which covers all nine U.S. census divisions – reported a 5.4 percent year-over-year gain through the end of June. But that’s down from the previous month when prices were up 5.9 percent from the year before. Which means, home prices are still rising but they’re showing signs of deceleration. Brian D. Luke, head of commodities, real & digital assets at S&P, says, even as they slow, price increases are outpacing inflation. “The S&P CoreLogic Case-Shiller Indices continue to show above-trend real price performance when accounting for inflation,” Luke said. “While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8 percent more than the Consumer Price Index.” Regionally, the largest gains were seen in New York City, while Portland showed the slowest rate of increase. (source)

Home buyers are watching the housing market closely, waiting for affordability to improve before making their move. Any drop in mortgage rates seems to inspire a wave of buyers looking to take advantage of the improvement. The latest new home sales numbers from the U.S. Census Bureau and the Department of Housing and Urban Development are the latest evidence of that. In July, new home sales reached the highest level in more than a year, spiking 10.6 percent from the month before and climbing 5.6 percent higher than last year at the same time. The gains – credited to falling mortgage rates during the month – outpaced economists’ expectations and marked the sharpest month-over-month increase in two years. They’re also another strong sign that buyer demand remains high and could climb even higher if, and when, rates drop further. (source)

Sales of previously owned homes increased 1.3 percent in July, breaking a four-month streak of monthly declines, according to new numbers from the National Association of Realtors. The improvement, while modest, was welcome. Lawrence Yun, NAR’s chief economist, says conditions are beginning to get better for buyers. “Despite the modest gain, home sales are still sluggish,” Yun said. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.” It’s true. Mortgage rates have been trending downward and just saw their third consecutive weekly decrease. And while prices continue to rise, an increasing number of available homes for sale should help slow future increases. As it stands, total housing inventory at the end of July was up 19.8 percent from one year ago. That offers buyers more homes to choose from while helping to moderate prices. (source)

Fannie Mae’s Economic and Strategic Research Group releases a monthly outlook covering its expectations for the economy and housing market. In its most recent release, the group revised its forecast for home sales through the end of the year, predicting fewer than before. But with mortgage rates falling and the inventory of homes for sale rising, the news has been good for buyers. So why the revision? Mark Palim, Fannie Mae’s vice president and deputy chief economist, says home buyers remain reluctant. “On its face, the lower rate environment should be good for home sales by helping loosen the grip of the so-called ‘lock-in effect,’ in addition to aiding affordability more generally,” Palim said. “However, high-frequency data, such as mortgage applications, home showing requests, and listings views, suggest that many potential home buyers remain reluctant to make the jump.” Whether home buyers are moved to make the jump in the weeks ahead will help determine what the market looks like as it heads into fall. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down from the week before for 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. It was the third consecutive weekly decline. Despite the improvement, however, demand for mortgage applications was also down week-over-week. Mostly, the decrease was due to a drop in refinance activity, which slowed after a significant spike the week before. Joel Kan, MBA’s vice president and deputy chief economist, says conditions are stabilizing. “Both mortgage rates and mortgage applications have now stabilized after a few weeks of financial market volatility, which led to a quick drop in mortgage rates,” Kan said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The number of homes valued at $1 million or more is now more than twice what it was pre-pandemic, according to a new analysis of the luxury home market. The data shows that 8.5 percent of homes in America are worth more than $1 million, up from 7.6 percent last year and 4 percent pre-pandemic. The increase should come as no surprise, given the recent rise in home prices. Price increases spiked during the pandemic-era buyer boom and have only begun to slow over the past year. Those increases pushed home values higher across all price ranges and regions. Certainly in the luxury home market, where the median price of a high-end home has reached $1.18 million and the number of million dollar homes has moved higher in all but three of the 50 most populated U.S. metros over the past year. (source)

The housing market has favored sellers all year, as a lower-than-normal number of available homes for sale has kept buyer competition high. But, according to one new analysis, conditions are changing. In fact, the analysis found that the housing market has moved into neutral territory for the first time this year. That means the current market doesn’t favor buyers or sellers due to a better balance between supply and demand. The number of homes for sale has risen and competition among buyers has eased. That’s good news for home shoppers – but it depends, of course, on where they’re looking. Some markets, particularly in the Northeast, remain better for sellers due to still-low inventory, while markets in Florida and Texas have moved to fully favor buyers. Wherever you are, though, mortgage rates could change the trend in the months ahead. If rates continue to fall, as expected, it could revive home buyer demand, competition, and the number of markets where conditions favor sellers over buyers. (source)

Each month, the National Association of Home Builders conducts a survey asking builders for their opinion of the market for newly built homes. The NAHB’s measure of builder confidence is a closely watched market barometer, as a home builder’s success is dependent on an ability to read the market and know what buyers want, where they want it, and when. In August, the survey – which is scored on a scale where any number above 50 indicates more builders see conditions as good than poor – scored a 39, down two points from the month before. But while confidence has been down this summer, builders see better days ahead, according to NAHB chief economist Robert Dietz. “With current inflation data pointing to interest rate cuts from the Federal Reserve and mortgage rates down markedly in the second week of August, buyer interest and builder sentiment should improve in the months ahead,” Dietz said. (source)

When homes are selling quickly, buyers have to move fast. That can be stressful. Choosing a home to buy is not a decision you want to make in a hurry. That’s why a recently released market analysis should be encouraging for anyone hoping to buy a home anytime soon. The analysis shows the housing market has cooled and is less competitive now than it’s been in recent years. For example, homes sold in July were typically on the market about 18 days, which is six days longer than they were last year at the same time. And while that’s still faster than the average pre-pandemic pace, listings lasting almost a week longer than last summer is definitely a break for buyers. The reason for the improvement is growing inventory. As the number of homes for sale has risen, the balance of supply and demand has improved and provided buyers some additional time to deliberate before making an offer. (source)