Monthly Archives: August 2024

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were relatively flat last week after falling to the lowest level in more than a year the week before. Rates were virtually unchanged for 30-year fixed-rate loans, FHA loans, and jumbo loans, while rates for 15-year fixed-rate loans decreased and 5/1 ARMs moved higher. With rates still lower than they’ve been all year, mortgage demand skyrocketed, jumping nearly 17 percent week-over-week. Joel Kan, MBA’s vice president and deputy chief economist, says refinance activity saw the biggest gains. “Overall, applications increased almost 17 percent to the highest level since January 2023, driven by a 35 percent increase in refinance applications,” Kan said. “Additionally, purchase applications increased by 3 percent, with small gains seen across the various loan types, indicating that prospective home buyers are slowly reentering the market.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

People move for a variety of reasons. A move could be inspired by everything from a new job in a different area to weather or a desire to be closer to family and friends. On the list of reasons people move, though, space is always near the top. Home buyers are often looking to expand – or downsize – their living space. But is there a size that’s right for most buyers? A new analysis from the National Association of Home Builders offers some clues on what most home shoppers want. According to the analysis, 21 percent of home buyers want a house between 1,600 and 2,000 square feet, while 26 percent want something smaller than 1,600 square feet. That means, nearly half of all home buyers are looking for a home under 2,000 square feet. Up next, an additional 38 percent of shoppers say they prefer a house between 2,000 and 3,000 square feet. That’s a decent sized home and a significant share of shoppers who’re interested in finding one. But 3,000 square feet may be the limit, as homes larger than 3,000 square feet were the least in demand, with just 14 percent of buyers looking for a home that size. (source)

The housing market has softened a bit in recent weeks, with mortgage rates and home prices both showing signs of calming. Whether or not it’s enough to inspire buyers remains to be seen. But according to one recent survey, current home shoppers are feeling positive about their position. In fact, a majority said they feel confident. Results found 56 percent of respondents said they expect to find and close on an affordable house that fits their needs. Additionally, 44 percent of surveyed home shoppers said they expect to get a good deal. That’s a positive sign for the summer housing market as it heads toward fall. But while current buyers are optimistic, a majority of survey participants still have affordability concerns. Home prices and mortgage rates topped the list of current concerns, with finding the right place coming in third on the list of worries. (source)

How easy or difficult it is for a prospective home buyer to get approved for a loan depends on credit availability. Current lending standards and access to loan programs play a part in determining whether or not a borrower can secure financing. That’s why the Mortgage Bankers Association tracks mortgage credit availability each month. Any increase in its Mortgage Credit Availability Index indicates that credit has become more available, while decreases signal that credit has tightened. In July, the index rose 3.3 percent. Joel Kan, MBA’s vice president and deputy chief economist, says access to credit is rebounding. “Overall credit availability grew to its highest level since October 2023 …,” Kan said. “Industry capacity has been low for some time, but we have now seen more than six months of credit expansion, which should be supportive for home buyers and refinance borrowers, as rates have declined in recent weeks.” July’s improvement was driven by increased conventional loan offerings such as ARMs and cash-out refinance loans. (source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey which asks Americans for their opinions on the housing market and economy. The survey covers everything from home prices and mortgage rates to job security and household income in an effort to determine how consumers feel about buying a home. According to the most recent results, Americans are feeling cautious. In fact, the number of respondents who say it’s a good time to buy a home was down 1 percent month-over-month, while the share who say it’s a good time to sell fell 2 percent. Doug Duncan, Fannie Mae’s chief economist and senior vice president, says Americans are pessimistic about affordability. “More consumers than not see home prices rising further; and slightly more consumers think mortgage rates will increase, rather than decrease, over the next 12 months,” Duncan says. But are they wrong? Well, according to Fannie Mae’s forecast, they might be. Its most recent outlook calls for decelerating home price growth and falling mortgage rates over the next year. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week 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 declines were significant and dropped rates to the lowest level since May 2023. Joel Kan, MBA’s vice president and deputy chief economist, says demand spiked as a result. “Mortgage rates decreased across the board last week and mortgage application volume reached its highest level since January of this year,” Kan said. “As a result of lower rates, refinance applications increased across all loan types, particularly for VA loans, and were almost 60 percent higher than it was at this time last year and were at its highest level in two years.” Demand for purchase applications saw a more modest 1 percent bump week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Homes for sale have hit a post-pandemic high and it’s helping make the housing market more buyer friendly, according to new data from the National Association of Realtors’ consumer website. The data shows the total number of homes on the market has been increasing for nine straight months, pushing the number of homes actively for sale 36.6 percent higher year-over-year in July and driving price cuts to the highest rate since October. Altogether, it’s starting to look like good news for buyers. “As sellers continue to list homes and buyers become choosier, the time a home spends on the market is extending, thereby helping the housing market move in a more buyer-friendly direction,” Danielle Hale, the website’s chief economist, says. “In response, sellers are curbing expectations and reducing listing price more often which could set the stage for more sales this fall, especially if mortgage rates continue to decline.” (source)

Housing market conditions can vary depending on a lot of factors. Location is an obvious one. What’s true in one market isn’t necessarily going to be true in others. It isn’t the only factor, though. Markets can also vary depending on price range. For example, over the past several years, the market for luxury homes has behaved differently than the market for typical homes. In fact, according to one recent analysis, luxury home values – defined as the most valuable 5 percent of homes in any given area – have trailed typical home values in annual appreciation. That is, until this year. Since January, luxury homes have been outpacing typical homes, with the typical home price up 3.2 percent year-over-year and luxury homes seeing a 3.9 percent gain. The reason? Well, luxury home inventory has been slower to recover than inventory in the rest of the market. Currently, total inventory is up 22.7 percent over last year, while the number of available luxury homes has increased 15.7 percent. (source)

Rising home prices during the spring sales season pushed the share of equity rich homes higher, according to new data from ATTOM Data Solutions. ATTOM’s most recent U.S. Home Equity & Underwater Report found 49.2 percent of mortgaged residential properties were considered equity rich, meaning the combined amount of loan balances on those properties was less than half their estimated market value. In short, spring was good for homeowners. Rob Barber, ATTOM’s CEO, says homeowner wealth turned for the better. “Homeowner wealth took a notable turn for the better during the second quarter as equity levels piggybacked on some of the biggest home-price spikes we’ve seen in recent years,” Barber said. “After a period where equity seemed stagnant or even declining, this brought another boost of good news for homeowners from the enduring housing market boom.” (source)

When a contract to buy a house is signed, that home’s sale is considered pending until the deal is closed weeks later. That makes contract signings a fairly reliable indicator of future home sales, since most signed offers lead to closed sales. The National Association of Realtors tracks pending home sales for this reason. Its Pending Home Sales Index is released monthly and is considered a good predictor of existing-home sales numbers. In June, the index moved 4.8 percent higher, with improvement seen in each of the country’s four regions. Lawrence Yun, NAR’s chief economist, says the growing supply of available homes is behind the increase. “The rise in housing inventory is beginning to lead to more contract signings,” Yun said. “Multiple offers are less intense, and buyers are in a more favorable position.” (source)