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Saving enough money to buy a house has always been a challenge. These days, coming up with a substantial down payment can seem almost impossible – especially for first-time buyers who don’t have the benefit of home-sale proceeds to help fund their purchase. Fortunately, though, buyers don’t have to come up with a full 20-percent down payment in order to qualify for a mortgage and purchase a house. Home buyers with lower down payments can still buy with the help of private mortgage insurance. What is PMI? Well, it’s insurance that allows a borrower who can’t put 20 percent down to qualify for a conventional loan by insuring the lender against losses. Typically, the cost of PMI is rolled into a borrowers’ monthly payment and can be removed once the borrower has reached a certain loan-to-value ratio. According to the most recent numbers, PMI helped 800,000 low down-payment buyers qualify for financing last year, with 65 percent of those being first-time home buyers. (source)

Each month, Fannie Mae’s National Housing Survey asks Americans how they feel about the housing market, economy, and their personal financial situation. The survey is a good gauge of home buying sentiment and tracks whether participants think it’s a good time to buy or sell a home, whether they think mortgage rates and prices will go up or down, whether they worry about losing their job, and whether they believe their personal finances will improve or not over the next year. According to the most recent results, consumer sentiment has improved overall, with the index up two points from the previous month. Among the results, 66 percent of respondents said they’d buy, rather than rent, a home if they were going to move. Also, though fewer Americans think home prices will fall over the next year, the net share who think mortgage rates will decline increased 5 percent. Overall, the share of participants who say it’s a good time to buy a home fell 5 percent while the share who say it’s a good time to sell was unchanged from the month before. (source)

Typically, buying something brand new is more expensive than buying it previously owned. That’s certainly true with homes. Older homes are generally more affordable than new construction. That isn’t likely to change. But while new homes are still more expensive than existing homes, the price premium for a new home is now at a record low. In fact, according to a new analysis from The National Association of Realtors’ consumer website, the price premium for new homes dropped to just 7.8 percent during the second quarter of this year. Danielle Hale, the website’s chief economist, says increased new home construction has brought value to buyers. “In many areas, these homes are not only available, they also offer better value compared to existing home inventories,” Hale said. “We’re even seeing new home price declines in some of the most active pandemic-era hot spots, signaling a shift toward greater affordability in markets that were previously out of reach for many.” Nationally, the average cost per square foot for a new home is $218.66, compared to $226.56 for existing homes. (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 improvement led to boosted mortgage demand, with both refinance and purchase activity up from the previous week. Joel Kan, MBA’s vice president and deputy chief economist, says borrowers took advantage of declining rates. “Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week,” Kan said. “Purchase activity continued to lead 2024’s pace, as increasing for-sale inventory of homes has been supporting home buying, but on the other hand weakness in the economic environment has deterred some prospective home buyers.” Demand for loans to buy homes is now 18 percent higher than it was at the same time one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The national median mortgage payment applied for by home buyers fell almost 2 percent in June from the month before, according to newly released data from the Mortgage Bankers Association. The MBA’s Purchase Applications Payment Index measures monthly mortgage payments based on the loans borrowers applied for during the month. In June, the median payment fell to $2,172 from $2,211 in May. For borrowers applying for lower-payment mortgages, payments fell to $1,500 from $1,512. Edward Seiler, MBA’s associate vice president, Housing Economics, and executive director, Research Institute for Housing America, says the improvement is a positive sign. “Affordability conditions improved in June, a positive sign for prospective home buyers looking to take advantage of slightly lower mortgage rates and moderating home prices,” Seiler said. “The median purchase application amount decreased to $324,800, and we expect that home-price growth will continue to stabilize as more inventory comes onto the market in many parts of the country.” (source)

When the combined total of what you owe on your home is less than half of its estimated value, you’re equity rich. That’s a good thing to be, which is why ATTOM Data Solutions’ most recent U.S. Home Equity & Underwater Report is encouraging news for homeowners. The report found the share of equity rich properties increased during the second quarter of this year after falling the previous three quarters. Rob Barber, ATTOM’s CEO, says that homeowners continue to do well. “With home prices at record highs you’d expect to see owners enjoying more equity in their homes so it’s good to see equity-rich rates rebound after a few slower quarters,” Barber said. During the second quarter 47.4 percent of mortgaged residential properties were equity rich, up from 46.2 percent during the first quarter. The highest proportion of equity-rich homes were found in New England, with Vermont, New Hampshire, and Rhode Island leading the list. Louisiana was the state with the lowest share of equity rich properties. (source)

Home prices have followed a pattern so far this year and, according to the latest S&P Case-Shiller Home Price Indices, it shows no sign of changing. S&P’s index – considered among the leading measures of U.S. home prices – found prices up just 2.3 percent year-over-year through the end of May. That’s the slowest annual price increase in two years. It also follows the established pattern, according to Nicholas Godec, head of fixed income tradables & commodities at S&P Dow Jones Indices. “May’s data continued the year’s slow unwind of price momentum, with annual gains narrowing for a fourth consecutive month,” Godec said. “National home prices were just 2.3 percent higher than a year ago, the smallest increase since July 2023, and nearly all of that gain occurred in the most recent six months. The spring market lifted prices modestly, but not enough to suggest sustained acceleration.” In other words, home prices have been gradually slowing for most of this year and the pattern is likely to continue as the market recalibrates. (source)

When an offer to buy a home is accepted and a contract has been signed, the closing process begins. But until the transaction is officially closed several weeks later, the home’s sale is considered pending. The vast majority of pending sales become final sales, which is why contract signings are considered a good indicator of future home sales numbers. That’s also the reason the National Association of Realtors tracks contract signings each month with its Pending Home Sales Index. According to the most recent results, contract signings were relatively flat in June, falling 0.8 percent from the month before. Lawrence Yun, NAR’s chief economist, says improvement may be on the way. “The Realtors Confidence Index shows early indications of potential contract signings increasing moving forward,” Yun said. “Realtors are optimistic that home buying and selling activity will increase.” In June, only the Northeast saw month-over-month gains, while the West, South, and Midwest all saw declines. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates were mostly flat last week from one week earlier. Rates saw little movement for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But despite steady rates, demand for loans was down from the week before, with refinance activity 1 percent lower week-over-week and purchase demand down 6 percent. Joel Kan, MBA’s vice president and deputy chief economist, says uncertainty is to blame. “There is still plenty of uncertainty surrounding the economy and job market, which is weighing on prospective home buyers’ decisions,” Kan said. “The 30-year fixed rate was little changed … but high enough that there was not much interest in refinancing. Purchase applications decreased by almost 6 percent, as applications for conventional, FHA, and VA purchase loans fell, despite slowing home-price growth and increasing levels of for-sale inventory in many regions.” (source)

The housing market has an affordability problem. The cost of buying a house has skyrocketed over the past several years. During the pandemic, a shortage of houses collided with a surge in buyer demand and drove prices higher. Then, mortgage rates began to increase early in 2022. Now, the combination of higher prices and elevated rates has caused the market to slow from its previously frenetic pace. But, according to a new commentary from Fannie Mae’s Economic and Strategic Research Group, that may be good for home buyers. The group releases a monthly forecast detailing where they see the economy and housing marketing heading from here. According to their most recent release, they’ve revised their forecast and see prices and rates moderating over the next year and a half. The group predicts home price growth of 2.8 percent this year, and just 1.1 percent in 2026. They also believe mortgage rates will begin to fall by the end of the year and move even lower next year. In other words, home buyers may soon see some relief, which is likely why Fannie Mae also revised their home sales forecast. They now expect more sales this year and further improvement in 2026. (source)