Monthly Archives: December 2024

When the pandemic first hit in March 2020, there weren’t many people thinking it would inspire prospective home buyers, but it did. With mortgage rates at historic lows and Americans able to move more freely due to remote work, buyer demand spiked. Now, just under five years later, those same pandemic-era home buyers may already be looking to sell. In fact, according to a new survey, 17.5 percent of current homeowners say they plan to sell their home next year and, among them, 32.2 percent have lived in their home less than five years. That’s a significant share of soon-to-be home sellers who have only been in their house a few years. What’s behind the data? Well, the most active group of would-be home sellers are in their 30s and 40s, which is the right demographic for move-up buyers. That same group of home sellers were also able to build up equity quickly over the past five years, allowing them to use those gains to get in the market sooner than they otherwise may have. (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 5/1 ARMs. Rates for 15-year fixed-rate loans were unchanged week-over-week. With rates down for the third straight week, mortgage application demand moved 5.4 percent higher. The improvement was mostly due to a spike in refinance demand, but Joel Kan, MBA’s vice president and deputy chief economist, says home buyers also remain active. “Purchase applications remained relatively strong and have shown annual gains in all but one week over the past three months,” Kan said. “In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow in many markets.” Demand for loans to buy homes is now 4 percent higher than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Each month, Fannie Mae surveys Americans and asks them for their opinion on whether it’s a good time to buy or sell a home, mortgage rates, home prices, their job and financial situation. The resulting Home Purchase Sentiment Index is a good gauge of how Americans are feeling about market conditions and the overall economy. According to the most recent release, survey respondents are feeling more confident and it’s mostly due to a sense that mortgage rates are going to fall. In fact, a record share of respondents said they expect rates to fall over the next year and it helped push the number who say it’s a good time to buy 6 percent higher. Mark Palim, Fannie Mae’s senior vice president and chief economist, says optimism has risen as Americans have adjusted to market conditions. “Notably, this improvement in sentiment continues a trend that began about two and a half years ago likely due in part to consumers’ slow-but-steady acclimation to current market conditions,” Palim said. Respondents are also feeling optimistic about their financial situation and home prices, both of which they expect to improve in 2025. (source)

Affordability is always a top concern for home buyers and, according to a new survey from Fannie Mae’s Economic and Strategic Research Group, that isn’t likely to change any time soon. The group surveyed housing and mortgage industry experts and found that they expect affordability conditions to continue to weigh on buyers in the new year. The good news, though, is respondents also said they believe home price increases will slow in 2025. Mark Palim, Fannie Mae’s senior vice president and chief economist, agrees. “We share our panelists’ view that home price growth is likely to decelerate next year, as the mix of continued elevated mortgage rates and the run-up in home prices of the past four years will likely continue to strain affordability and remain an impediment to many would-be home buyers,” Palim said. Fannie Mae’s fourth quarter Home Price Expectations Survey shows home prices increasing 3.8 percent in 2025, after projecting a 5.2 percent growth in 2024. (source)

The end of the year is prediction season. Experts and insiders in every industry release future forecasts offering their take on what will happen over the next 12 months. The housing market is no exception. The National Association of Realtors’ consumer website, for example, recently released an outlook for 2025 and it looks to be good news for home buyers. The forecast says the housing market will find better balance in the year ahead, with the number of homes for sale reaching its highest level since 2019. More available homes for sale will result in less competition between buyers and more sellers cutting prices on listed homes. Mortgage rates are also expected to improve in 2025, though the improvement will likely be slow and gradual. Overall, increased inventory will help buyers find better choices and improved conditions but the market will still be costly, according to the website’s forecast. Affordability conditions will remain particularly challenging in areas where inventory has yet to rebound. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates moved lower last week from the week before. Rates were down 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 rates have fallen and it’s motivating buyers. “Mortgage rates fell to their lowest level in over a month last week …,” Kan said. “The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year.” As a result, the MBA’s Purchase Index increased for the fourth straight week last week, moving 6 percent higher. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Moving to a new home is exciting. Sure, there will be headaches and stress along the way, but starting off fresh in a new place – whether it’s five miles away or 500 miles away – is rejuvenating. That’s undeniable. But it’s also true that some of us are more ready to make a move than others. In fact, according to a recent analysis of last year’s Census data, one state in particular had more movers than any other. So which was it? Well, the data shows 3.3 million Texans moved within Texas last year – which is both the highest number of people who moved within a state and the highest share, at 11 percent of the state’s population. Wherever you are, though – if you’re moving – you’re likely staying close to home. Between 1989 and 2021, the median distance home buyers moved was just 10 to 15 miles. (source)

Once a home seller agrees to a buyer’s offer and the parties sign a contract to buy, that home’s sale is considered pending until it closes weeks later. The National Association of Realtors tracks pending sales because they’re considered a good forward-looking indicator of future home sales numbers. After all, most pending sales lead to final sales. That’s why it’s good news that the latest results of the NAR’s index show pending home sales up 2 percent in October from the month before. Lawrence Yun, NAR’s chief economist, says it’s a sign buyer momentum is gaining. “Home buying momentum is building after nearly two years of suppressed home sales,” Yun said. “Even with mortgage rates modestly rising despite the Federal Reserve’s decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market.” (source)

The new home market helps keep the overall housing market balanced. When demand is high, builders build more homes. That adds to the supply of available homes and helps keep home prices from spiking – which means, whether you’re considering buying a new house or not, the new home market impacts your home search. So is it bad news that the latest numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show new home sales down 17.3 percent in October? Well, it may not be as bad as it seems. First off, mortgage rates increased in October, after falling throughout August and September. That likely had a discouraging effect on buyers. The other factor was weather. Two major hurricanes led to a sharp drop in sales in the South, where the new home market has been most active. In short, between extreme weather events and rising rates, October’s new home sales numbers aren’t likely the result of a downward trend. More than likely, they’re the result of a unique set of conditions and regional factors. (source)