Monthly Archives: September 2024

Home prices are a hot topic after years of skyrocketing growth. Double-digit annual increases were common in most markets during the pandemic and, though they’ve slowed considerably, prices are still moving upward in most markets. But what should home buyers – and sellers – expect in the months ahead? Well, Fannie Mae’s Home Price Expectations Survey polls industry experts each quarter and gets their read on where they think prices are headed. According to the most recent release, Fannie Mae’s panel raised their expectations for 2024, now saying they expect prices to be up 4.7 percent for the year, rather than the 4.3 percent they predicted last quarter. As for 2025, they expect prices to gain an additional 3.1 percent next year. The national appreciation rate since 1987, according to the Case-Shiller Home Price Indices, is 4.8 percent. (source)

Credit availability isn’t typically among home buyers’ top concerns – but it matters. Lending standards and the availability of loan programs affect how easy or difficult it is to get approved for a loan. When credit is tight, for example, prospective borrowers will need to have their finances in order more so than they would if it were looser. That’s why the Mortgage Bankers Association keeps a monthly measure of how tight or loose credit is with their Mortgage Credit Availability Index. Any increase in the index lets borrowers know credit has loosened, while decreases mean availability has tightened. According to the most recent release, the index rose another 1 percent in August, continuing recent gains and providing better access to borrowers. Joel Kan, MBA’s vice president and deputy chief economist, says credit availability is at a two-year high. “Credit availability increased in August, with the conventional credit index reaching its highest level since July 2022,” Kan said. The MBA’s index has now shown month-over-month increases for eight consecutive months. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell for the sixth consecutive week last week, bringing rates to the lowest level since February 2023. Rates fell 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. Joel Kan, MBA’s vice president and deputy chief economist, says there are a number of factors behind the recent declines. “Treasury yields have been responding to data showing a picture of cooling inflation, a slowing job market, and the anticipated first rate cut from the Federal Reserve later this month,” Kan said. “With rates almost a full percentage point lower than a year ago, refinance applications continue to run much higher than last year’s pace.” As of last week, the refinance index was up 106 percent over year-before levels. Purchase demand, on the other hand, still trails last year by 3 percent, despite a 2 percent week-over-week gain. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Traditionally, spring and summer are the housing market’s busiest seasons. Home shoppers tend to arrive as the weather begins to warm and then, as summer fades, the market tends to slow. But that doesn’t mean potential buyers should put their plans on hold until next spring. In fact, fall can be among the best times to buy and, according to a new analysis from the National Association of Realtors’ consumer website, early October, in particular, could be this year’s best time for buyers. Why? Well, for one, mortgage rates have been falling in recent weeks, making affordability levels more manageable. Danielle Hale, the website’s chief economist, says improved inventory is another reason. “Unlike the past few years, we are seeing ample for-sale inventory which could soak up any late-season demand in many markets, making the fall a great time to buy even if falling mortgage rates amp up more demand than is typical,” Hale said. “This year’s buyers who are looking for that optimum mix of ample options and the potential to save on list price are going to find some of the best market dynamics in years during the first week of October.” (source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans that asks participants whether they think it’s a good time to buy or sell a home, whether they think home prices and mortgage rates will rise or fall over the next year, and how secure they feel in their job and income. In August, the index saw a 0.6 percent increase from the month before, mostly due to rising optimism about mortgage rates and home prices. Mark Palim, Fannie Mae’s vice president and deputy chief economist, says overall sentiment remained steady. “On a national level, housing sentiment was largely unchanged in August despite some positive developments for affordability, including a meaningful decline in actual mortgage rates and an uptick in home listings in certain markets, particularly in the Sunbelt,” Palim said. It’s true. The share of respondents who said it’s a good time to buy was relatively flat, falling just 1 percent from the month before, while the share who said it’s a good time to sell remained unchanged month-over-month. (source)

The housing market has had an inventory problem for years now. Too few homes for sale has driven prices higher, increased competition and bidding wars, and limited options for buyers. Fortunately, though, the market has finally begun to bounce back. In fact, according to new numbers from the National Association of Realtors’ consumer website, inventory has now risen for 10 straight months and was up 35.8 percent in August, pushing the number of homes for sale to its highest level since May 2020. Danielle Hale, the website’s chief economist, says this fall could be good for buyers. “As the market slows seasonally, fall is one of the best times to buy a house,” Hale said. “Falling mortgage rates are likely to bring out additional home shoppers and a busier fall season than usual, but the boost in activity is unlikely to overwhelm the usual seasonal slowdown. Shoppers, who are out this fall, are likely to face lower competition than is expected in spring 2025 as more shoppers anticipate better mortgage rates.” (source)