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Americans Say They Prefer Buying To Renting

Fannie Maeâ€™s most recent Home Purchase Sentiment Index finds Americans feeling more optimistic about both the housing market and their income. In fact, the index set a new all-time high in July with each of the six components increasing from the month before. Perhaps most notably, the number of respondents who said theyâ€™d prefer to buy if they were going to move jumped to 67 percent, while the number who said they would rent set a new all-time low at 26 percent. Doug Duncan, Fannie Maeâ€™s senior vice president and chief economist, says the trend is being led by younger Americans. â€œOne interesting potential bright note for housing in the July survey is that younger households may finally be shifting toward buying rather than renting in greater numbers,â€ Duncan said. â€œWhether the shift in sentiment in July toward buying rather than renting on their next move holds up or is a temporary reaction to their view that rents are on the rise and mortgage rates will be lower, we will see. However, we are getting set to release some additional research in early August showing evidence of a broader move by older millennials in the direction of ownership.â€ MoreÂ here.

Does Walkability Affect Home Values?

When potential home buyers are surveyed about the amenities and features they most desire in their new home and neighborhood, walkability is often high on the list. Having a house within walking distance to parks, shops, restaurants, schools and jobs is consistently coveted by buyers but not all that commonly found. In fact, a recent analysis found less than 2 percent of active listings had a Walk Score of 90 or higher. So, if walkability is so rare, does it affect a homeâ€™s price? In short, yes. The data showed an average increase of $3,250 per Walk Score point, though the effect was more pronounced in some areas than others. For example, in San Francisco a more walkable neighborhood increased a comparable homeâ€™s value by $187,630, while in Phoenix a similar increase in walkability only added $15,700 in value. There was even one area where proximity to businesses and services wasnâ€™t a boost to home values. In Orange County, Calif., a walkable neighborhood had little to no effect on values due to a preference for privacy. Still, with 46 percent of older buyers and 56 percent of Millennials saying theyâ€™d prefer to buy in a walkable community, these homes â€“ if you can find one â€“ will more than likely be selling at a premium. MoreÂ here.

Majority of Home Sellers Say Now’s The Time

In today’s real estate market, inventory is the big story. That’s because there are too few homes for sale in many markets across the country. And, when there are fewer homes for sale, competition among buyers heats up and current homeowners can be choosy when deciding which buyer to sell to. In other words, when there are more prospective buyers than there are homes for sale, prices go up. That’s a seller’s market. And according to one recent survey, current homeowners are starting to catch on. In fact, a survey of 1,700 homeowners found 52 percent thought now was a good time to sell in their neighborhood. Last year, just 34 percent of respondents said it was a good time to sell. In addition, there was a 14 percent increase in the number of participants who said sellers have more power than buyers in today’s market. But though a competitive market and confident sellers may seem like bad news for buyers, the more current homeowners who decide to take advantage of current conditions and put their homes up for sale, the more inventory will rise. As that happens, there will be more homes to choose from and price increases will begin to slow. More here.

Survey Finds Average Mortgage Rates Down

According to the Mortgage Bankers Associationâ€™s Weekly Applications Survey, average mortgage rates fell across all loan categories last week, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But despite lower rates, demand for mortgage applications actually fell from the week before. In fact, the Market Composite Index â€“ which measures both refinance and purchase application demand â€“ was down 3.5 percent from the week before. Lynn Fisher, MBAâ€™s vice president of research and economics, told CNBC that the number of Americans requesting loan applications is still higher than last year, though things are slowing. â€œPurchase application volume continues to run ahead of last yearâ€™s pace, but after growing quite strongly in the first half of the year, the rate of improvement has decelerated this summer,â€ Fisher said. Still, mortgage applications to buy a house are up 6 percent from one year ago. Refinance demand, on the other hand, is 56 percent higher than last year. The MBAâ€™s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. MoreÂ here.

Majority Of Millennials Want To Buy A Home

Over the past few years, a lower-than-usual number of young Americans have been buying homes. Historically, first-time home buyers made up around 40 percent of all home sales. In recent years, however, the number has been hovering just above 30 percent. Still, survey after survey shows that â€“ despite not being as active in the market â€“ young Americans still want to become homeowners. In fact, according to a recent survey from the National Association of Home Builders, 81 percent of respondents between the ages of 18 and 29 said they want to buy a home. That, combined with the fact that nearly 40 percent of total participants said they would like to buy a home in the next three years, is encouraging news for the residential real-estate market. Ed Brady, NAHBâ€™s chairman, says homeownership is still an important part of the American Dream. â€œThe survey shows that most Americans believe that owning a home remains an integral part of the American Dream and that policymakers need to take active steps to encourage and protect homeownership,â€ Brady said. Americans agree. The survey also found 72 percent in favor of the government providing tax incentives to encourage homeownership. MoreÂ here.

Number Of Affordable Markets Increases

Last year, an analysis of 417 counties across the country found 82 of them less affordable than historically normal. The same analysis done this year showed 74 counties exceeding normal levels of affordability. That improvement, however small, is an indication that home prices are increasing at a somewhat slower pace this year. The data â€“ from RealtyTracâ€™s Q2 2016 Home Affordability Index â€“ looked at the percentage of average wages needed to make monthly mortgage payments on a median priced home with a 30-year fixed-rate loan and a 3 percent down payment. Daren Blomquist, RealtyTracâ€™s senior vice president, says there is good news to be found in the report. â€œAlthough nearly one in five U.S. housing markets was not affordable by historic standards in the second quarter, the good news is that affordability is improving compared to a year ago in the majority of markets thanks to a combination of slowing home price appreciation and accelerating wage growth, along with falling interest rates,â€ Blomquist said. â€œThe average interest rate on a 30-year fixed-rate mortgage is down 37 basis points from a year ago, while annual wage growth accelerated compared to a year ago in 72 percent of the markets we analyzed and home price growth slowed compared to a year ago in 68 percent of the markets, including bellwether markets such as Los Angeles County, Miami-Dade County, Brooklyn, Dallas County, and San Francisco County.â€ MoreÂ here.

Housing Trends Improve In Nearly Every State

The residential real estate marketâ€™s rebound following the housing crash has been gradual, with month-over-month volatility sometimes masking the fact that things were getting better one small step at a time. Year-over-year results, on the other hand, have consistently revealed the slow upward grind of housing markets across the country. As proof of that, Freddie Macâ€™s most recent Multi-Indicator Market Index â€“ which compares current conditions to long-term norms in each of the 50 states and the top 100 metropolitan areas â€“ found that 88 percent of metros are showing an improving three-month trend. Additionally, 46 of 50 states are trending upward. Len Kiefer, Freddie Macâ€™s deputy chief economist, says the improvement has been consistent, if varied from region to region. â€œNationally, MiMi in May registered 85, a 7.3 percent year-over-year increase and the 49thÂ consecutive month of year-over-year increases,â€ Kiefer said. â€œMany of the Western markets continue to see strong home sales. However, itâ€™s the Southern states where MiMi continues to register some of the strongest gains buoyed by an improving employment picture. For example, the majority of Southern states showed stronger employment growth than the national average and all of the eight markets in Florida that MiMi tracks are now back to their historic benchmark levels of housing activity.â€ MoreÂ here.

Pending Sales Hold Steady In June

Pending home sales are an important indicator of the housing marketâ€™s health because they measure contract signings, not closings. Since signings typically precede closings by a few weeks, pending sales are seen as a good predictor of where future home sales numbers will fall. In June, the National Association of Realtors found pending sales up just 0.2 percent over the month before. Lawrence Yun, NARâ€™s chief economist, said there are not enough homes available for sale and itâ€™s preventing interested buyers from taking advantage of otherwise favorable conditions. â€œWith only the Northeast region have an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cool down after a very active spring,â€ Yun said. â€œUnfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.â€ Still, despite contract signings slowing in June, sales of previously owned homes are expected to finish the year at the highest annual pace in 10 years. MoreÂ here.

Mortgage Rates Increased Last Week

According to the Mortgage Bankers Associationâ€™s Weekly Applications Survey, average mortgage rates rose across all loan categories last week, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. The increase slowed mortgage demand, especially refinance activity. Michael Fratantoni, MBAâ€™s chief economist, told CNBC activity has been up-and-down lately, despite the fact that rates are well below where they were last year at this time. â€œDespite the 30-year fixed mortgage rate being almost 50 basis points lower than a year ago, refinance activity has been extremely sensitive to rate increases as the pool of borrowers who can benefit from refinancing continues to diminish,â€ Fratantoni said. But it wasnâ€™t just refinance activity, demand for loans to buy homes was also down, dropping 3 percent from the week before. Still, total mortgage application volume is up 42 percent from the same week one year ago. And though that increase can partly be credited to rising refinance demand spurred by declining mortgage rates, home sales are also up over last year. The MBAâ€™s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. MoreÂ here.

New Home Sales Up 25% Over Last Year

In June, sales of newly built, single-family homes reached their highest level since 2008, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. The 3.5 percent increase from May puts new home sales 25.4 percent higher than they were at the same time last year. Combined with increasing sales of previously owned homes and a bump in residential construction, the improvement indicates the housing market is gaining strength. In fact, not only were Juneâ€™s figures higher than economistsâ€™ expected, Mayâ€™s estimate was revised upward as well. However, despite the encouraging news, a closer look at the numbers shows the gains were not evenly distributed throughout the country. For example, the Midwest and West both saw increases of just over 10 percent. On the other hand, the Northeast fell 5.6 percent and the South was basically flat from the month before. Also in the report, the median price for a new home rose 6.1 percent from last year. The median sales price in June was $306,700; the average price was $358,200. But though prices were up, so was inventory. The number of new homes available for sale increased 1.2 percent over the month before. MoreÂ here.