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According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications was up 9.9 percent during the first week of the year. The gains included a 6 percent increase in demand for loans to buy homes and a 19 percent spike in refinance activity. Joel Kan, MBA’s vice president and deputy chief economist, says the improvement came despite a rate increase. “Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,†Kan said. “The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines.†Average rates were up across all loan categories last week, including for 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 MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The number of homes for sale typically falls during the holiday season. After all, potential sellers generally prefer to put their move on hold until after the new year, if they have the option. Because of this, the inventory of available homes typically decreases somewhere between 7 and 13 percent in December from November. Last year was no different. But while inventory declined, it only fell 5.5 percent, according to new numbers from the National Association of Realtors’ consumer website. Combined with the fact that newly listed homes were up 9.1 percent over year-before levels, the data may be a sign that inventory levels will rebound this year, which would be a positive turn for home buyers. Danielle Hale, chief economist for the website, says the improvement is encouraging but modest. “We are optimistic that inventory levels are moving in a positive direction, but the number of homes on the market is still low relative to pre-pandemic levels.†Hale said. “Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes.†(source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans which asks participants for their view of the housing market and economy. Participants are asked whether they feel now is a good or bad time to buy or sell a home, where they think mortgage rates and prices are headed, and about their personal financial situation and job security. According to the most recent results, Americans are feeling more optimistic about home buying conditions and specifically mortgage rates. In fact, a survey-high 31 percent of respondents said they feel rates will fall over the next 12 months. The expected rate drop has also boosted the number of participants who say they feel now is a good time to buy a home, with a 3 percent increase over the previous month’s results. Mark Palim, Fannie Mae’s vice president and deputy chief economist, says the results indicate Americans feel affordability may ease this year. “A more optimistic rate outlook among consumers may signal an expectation that home affordability pressures will ease in 2024,†Palim said. (source)

The first thing a prospective home buyer has to plan for financially is the down payment. It’s a significant amount of money to come up with and you need to have a plan to cover it and closing costs. After that, though, it’s time to start thinking about your potential monthly mortgage payment. It’s likely to be among your biggest bills and you want to make sure it works with your budget and won’t cause you financial stress. So what is the typical mortgage payment these days? Well, according to the Mortgage Bankers Association, the median monthly mortgage payment is now $2,137. The good news for buyers, though, is that falling rates have payments trending lower. Edward Seiler, MBA’s vice president, housing economics, and executive director of the Research Institute for Housing America, says affordability conditions have been easing. “Home buyer affordability improved in November, with a decline in mortgage rates providing relief to prospective home buyers,†Seiler said. “MBA expects that affordability conditions will continue to improve as mortgage rates decline, which should generate increased demand heading into the spring home buying season.†(source)

It’s a new year and that means everybody’s thinking about what the next 12 months will look like. In the housing market, that means wondering what’s ahead for prospective home buyers and sellers. Will the market heat up again and move prices higher? Will mortgage rates fall and improve buyers’ purchasing power? Will there be inventory gains or will the number of homes for sale remain low? Well, according to one recently released report, Americans expecting to get into the market this year should expect improved conditions from last year but not a “white hot†market like 2021. The forecast says mortgage rates should continue to calm but remained elevated from where they were during the pandemic. The improvement will be enough to get more buyers interested, and help some sellers make the jump, but the increase in activity won’t be dramatic. Similarly, home prices aren’t expected to move in any direction too significantly. In other words, the market will be fairly steady in 2024. We’ll see improved conditions and the gains, though gradual, should be enough to get more Americans moving. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates ended 2023 with a slight increase for most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration. But despite the end-of-the-year increases, Joel Kan, MBA’s vice president and deputy chief economist, says rates are now significantly lower than they were in October, when they peaked. “The 30-year fixed mortgage rate edged higher last week and ended 2023 … over a percentage point lower than its recent peak … in October 2023,†Kan said. “The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 percent lower than a year ago.†The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The internet changed the way we shop for homes. These days, hopeful home buyers typically start their search online before heading out to look at houses that seem like a good fit. Online searches are certainly convenient for potential buyers but they’re also a good way of tracking what buyers want and where they’re looking. One new analysis looked at page-view traffic – along with home price growth and days on market – in an effort to narrow down which were the most popular markets of 2023. The results show that last year’s home buyers were more interested in smaller towns than big cities. In fact, of the top 10 most popular markets, only one had a population of more than 100,000. The reason may be obvious. Affordability was a factor for buyers in 2023 and smaller towns offer buyers better opportunities to find a house that won’t break their budget. Regionally, the Northeast dominated the top 10 markets with Connecticut taking four of the top 10 spots and West Chester, Pennsylvania claiming the top spot. (source)

After slowing in October, the number of contract signings stabilized in November. The National Association of Realtors’ Pending Home Sales Index – which measures the number of contracts to buy homes signed during the month – saw no change from the month before but did find buyer activity increasing in most regions, with gains seen in the Northeast, Midwest, and West. Lawrence Yun, NAR’s chief economist, says falling mortgage rates are beginning to build home buyer interest. “Although declining mortgage rates did not induce more home buyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,†Yun said. According to Yun, buyers are now saving around $300 per month on their prospective mortgage payment due to the recent drop in mortgage rates. That improvement will likely help add to building buyer interest should it continue in the months ahead. (source)

Buying a house has gotten more challenging over the past few years. Mortgage rates moved higher and made affordability a bigger factor for home buyers. In fact, for nearly three years, affordability trends have been worsening. But according to ATTOM Data Solutions’ fourth-quarter 2023 U.S. Home Affordability Report, that trend has recently halted. Rob Barber, ATTOM’s CEO, says that’s good news. “The good news is that home affordability has stopped getting tougher around the U.S., at least for the moment,†Barber said. “The annual fall slowdown in the housing market clearly has helped stem the tide working against potential purchasers. Whether that’s just a temporary thing tied to seasonal market patterns is something we won’t know until next year, especially given recent signs that interest rates are coming down.†Whether affordability continues to ease in 2024 remains to be seen but, for now, the news is good for prospective home buyers. (source)

The S&P Case-Shiller Home Price Index is considered among the leading measures of U.S. home prices. It has been collecting home price data for more than 30 years and covers all nine census regions. According to its most recent release, the index shows a year-over-year price gain of 4.8 percent, up from the previous month, when prices rose 4 percent. But while the index shows an accelerating price trend, it’s based on data through October, when conditions were slightly different than they are now. Brian Luke, head of commodities, real and digital assets at S&P, says recently falling mortgage rates may lead to further price gains. “Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher,†Luke said. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.†In other words, higher rates typically slow demand from buyers, which helps soften prices. As rates come down, it may push demand – and prices – even higher. (source)