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A prospective borrower’s chances of being approved for a loan aren’t fixed. There are times when lending standards are looser and getting a loan is easier. There are also times when there are fewer available loan programs and tighter conditions mean borrowers will need to be more financially secure if they hope to get approved. In other words, mortgage credit availability matters. That’s why the Mortgage Bankers Association tracks it each month with its Mortgage Credit Availability Index. In July, the index rose slightly, indicating conditions have improved for borrowers. Joel Kan, MBA’s vice president and deputy chief economist, says ARM loans were behind the gains. “Credit availability edged slightly higher in July, driven by increased availability of ARM loans,” Kan said. “This development was consistent with a steeper yield curve and the jumbo-conforming spread back in negative territory. The average jumbo rate was around 8 basis points lower than the average conforming rate in July.” (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 conforming 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 the decline pushed refinance activity to a four-month high. “The 30-year fixed mortgage rate declined … last week, which spurred the strongest week for refinance activity since April,” Kan said. “Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications.” But despite favorable rates, home buyers failed to respond. In fact, purchase demand rose only 1 percent from the previous week, though it remains 17 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)

Just because the vast majority of us say we’d like to be homeowners doesn’t mean we necessarily understand what it takes to get there. The buying process can be stressful – and the challenges don’t end once you’ve closed and have keys to your new place. Just ask recent first-time buyers. According to a new survey, first-time home buyers say they found the process stressful, even more so than finding a job or planning a wedding. They also reported challenges. Among them, almost half said understanding the full scope of what buying a home entails was difficult, as was finding a home that matched their wish list. Recent buyers said they had to compromise, including commuting farther to work, buying in a location that wasn’t their first choice, and purchasing a home with fewer amenities (e.g. no backyard, no garage, no pool). They also said unexpected repairs and hidden costs were an eye opener. But despite the challenges and surprises, first-time buyers are glad they did it. In fact, 80 percent said the experience gave them a greater sense of control and boosted their financial confidence. (source)

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)