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According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes rose 8 percent last week from the week before. The improvement helped push total application demand nearly 4 percent higher week-over-week. Joel Kan, MBA’s vice president and deputy chief economist, says the gains extend a recent trend. “Mortgage rates increased slightly last week but, there continues to be an upward trend in purchase activity,†Kan said. “Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season.†Average mortgage rates were fairly steady last week, though up from the week before. Increases were seen for 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Despite the ups-and-downs of the housing market over the past few years, some things have remained constant. The lack of available homes for sale, for example. Low inventory has been an issue for most of the past decade and got considerably worse during the pandemic. These days, the number of homes for sale is improving but continues to trail normal levels, leading to ongoing frustration for home buyers and upward pressure on prices. Fortunately, though, 2024 may bring about a change. Many market forecasts see improved inventory levels ahead due to falling mortgage rates and rising new home construction. Building new homes is the fastest way to add supply to the market and home builders have been doing their part. In fact, according to newly released numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, the number of new housing units completed in 2023 was 4.5 percent higher than the year before. And, with building permits up 6.1 percent year-over-year in December, further gains can be expected as more homes begin construction and hit the market. (source)

Fannie Mae’s first forecast for 2024 should be encouraging for anyone considering buying a home this year. That’s because its Economic and Strategic Research Group – which releases a monthly outlook for the housing market and overall economy – sees affordability conditions easing, with lower mortgage rates and slower home-price increases in the months ahead. In fact, the group says prices will rise just 3.2 percent this year, compared to 7.1 percent in 2023. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says potential rate cuts should also help home buyers. “In 2024, we expect home sales and mortgage origination activity to begin a gradual recovery in the presence of a slow-growing economy,†Duncan said. “Inflation’s decline and the resultant Fed pivot to signaling future rate cuts lead us to believe that home sales and mortgage originations likely bottomed out in the second half of 2023 and that a gradual improvement is now underway.†Duncan believes this year will be better for buyers, with the existing-home market beginning to normalize and more new home construction helping to add to the inventory of homes for sale. (source)

Sales of previously owned homes fell 1 percent in December, according to newly released numbers from the National Association of Realtors. The decline was driven by slower sales in the Midwest and South, while sales increased in the West and were flat in the Northeast. Lawrence Yun, NAR’s chief economist, says improvement is on the way. “The latest month’s sales look to be the bottom before inevitably turning higher in the new year,†Yun said. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.†As it is, the number of existing homes available for sale was 4.2 percent higher than year-before numbers at the end of December. But while the year-over-year improvement is positive, inventory is still low. In fact, the NAR’s report found a 3.2-month supply of unsold homes available at the end of the month. A 6-month supply is considered healthy for the housing market. (source)

The National Association of Home Builders’ Housing Market Index measures how confident builders are in the market for new homes. In January, the index saw its second straight monthly improvement, as home builders expressed growing optimism about current sales conditions and prospects for the first half of the year. Alicia Huey, NAHB’s chairman, says the gains are due to lower interest rates. “Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,†Huey said. “Single-family starts are expected to grow in 2024, adding much needed inventory to the market.†The index – which is scored so that any number above 50 indicates more builders feel conditions are good than poor – rose seven points in January to 44, with the component measuring expectations for the next six months up 12 points to 57 – the first time it reached positive territory since August. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell 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, 15-year fixed-rate loans, and 5/1 ARMs. The decline brought rates to the lowest level in three weeks. It also led to a spike in demand for mortgage applications, according to Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications,†Kan said. “Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market.†The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

For the most part, people sell their home because they want to buy a different one. Which means, if you’re a home seller, you’re also likely a home buyer. It also means there are likely more than a few potential home sellers who are ready to move but have been waiting for affordability conditions to improve before becoming a buyer again. After all, an affordable monthly payment isn’t an easy thing to give up. So now that rates have fallen over the past few months, are more homeowners ready to sell? According to one new survey, the answer is yes. In fact, the survey found the share of homeowners who say they’re considering selling within the next three years climbed 6 percent from last year. That’s a significant increase. The survey also found homeowners with a mortgage rate below 5 percent were just as likely as those with higher rates to say they’re thinking about selling. Whether or not these homeowners actually sell remains to be seen but, if they do, it could lead to an inventory bump and a better balanced market. (source)

According to recently released housing market forecasts, economists expect a better year for home buyers in 2024. Mortgage rates have started to come down after climbing higher over the past year and a half. Home price increases have slowed in most parts of the country. Even the inventory shortage is expected to get better this year. There’s a general sense that the housing market will improve in the months ahead. And according to a new survey from the National Association of Realtors’ consumer website, that feeling has first-time home buyers optimistic about their prospects. In fact, the survey found, among Americans expecting to buy their first home in 2024, 61 percent say they think now is the right time to buy. Danielle Hale, the website’s chief economist, says that’s a change from last year. “Buying a first home can be a daunting task,†Hale said. “Couple high interest rates with historically low inventory of homes available for sale in 2023, and hopeful buyers have faced a particularly challenging market.†Fortunately, with affordability improvements on the horizon, first-time buyers are feeling better positioned, with 40 percent saying they’ll be able to afford to buy within the year. (source)

Mortgage rates have calmed recently. In fact, they’ve fallen pretty significantly since reaching highs last October. But while rates have given buyers some relief over the past few months, they remain elevated compared to the historic lows seen during the pandemic. In other words, rates are still a factor for potential home buyers – especially younger buyers. But while 67 percent of millennials say they regret not buying when rates were at all-time lows, they aren’t discouraged by today’s rates. In fact, according to a recent survey, 78 percent of respondents said they’d accept a rate higher than the national average and 65 percent said they’d still buy even if rates were almost double what they are now. It seems millennials who are in the market for a home aren’t going to let rates determine when they buy. Mostly, that’s because the majority of millennial respondents said they plan to refinance in the future if, and when, better rates become available. (source)

In a challenging housing market, home buyers need to stay flexible. That means considering everything from buying a house that needs some work to buying a house in a neighborhood farther from home. These days, with prices and mortgage rates pushing buyers’ budgets, some shoppers have even weighed interstate moves. Of course, moving to another state is a big commitment and isn’t for everyone but one recent study found buyers who take the leap have found big savings after hitting the road. In fact, buyers who moved across state lines saved an average of $7,500 on the home they purchased. That’s up significantly from 2019, when interstate buyers only saw a savings of $2,800. So where are interstate movers most likely to go? Well, the study found cities in the South dominated the top five markets for out-of-state moves, with Charlotte, Raleigh, and Orlando all on the list. Affordable markets were also found in the Midwest and Northeast. (source)