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Your mortgage payment will be among your biggest monthly bills. That makes it an important number to familiarize yourself with before buying a house. After all, no one wants to buy a house that will lead to financial stress and money worries. So what does the median mortgage payment look like now? Well, according to the most recent numbers from the Mortgage Bankers Association’s Purchase Applications Payment Index, the median payment applied for by purchase applicants increased to $2,199 in October from $2,155 the month before. The $44 increase was mostly due to rising mortgage rates during the month. Since then, however, rates have been falling, which means improvement is on the way. Edward Seiler, MBA’s associate vice president of Housing Economics and executive director of the Research Institute for Housing America, says it’ll happen early next year. “Home buyer affordability conditions declined further in October, with the jump in mortgage rates during the month,†Seiler said. “MBA expects affordability conditions to remain challenging to close out 2023 before a slight improvement by early next year.†(source)

A new report from ATTOM Data Solutions looks at affordability, foreclosures, and underwater mortgages in an effort to determine which housing markets across the country are most vulnerable to decline. Its findings provide a map of exactly where the housing market is strongest and where there may be weaknesses. So where are the country’s strongest markets? Well, the report shows the vast majority of the country is on good footing. Among the 578 included counties, the South was the strongest region with 18 of the 50 least vulnerable markets. Tennessee alone had seven of the 50 strongest housing markets. The Midwest followed with 13, while 12 were located in states across New England. The weakest markets were located in the New York and Chicago metro areas, along with central California. Rob Barber, ATTOM’s CEO, says even the most at-risk markets aren’t at risk of a crash. “It is important to stress that getting onto the most-vulnerable list doesn’t signal an imminent crash for any local market,†Barber said. “It just means that they have greater potential tripwires that could lead to a decline.†(source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey which asks Americans for their view of the housing market and their personal financial situation. The survey gauges how respondents feel about buying or selling a home, mortgage rates, home prices, their job security, and income. In November, the index was relatively unchanged, as Americans’ perception of the market has remained stuck since the first half of the year. A majority of respondents still say they believe it’s a good time to sell a home, but the number who say it’s time to buy remains low. A rising number of participants see mortgage rates falling over the next 12 months, but home price expectations were relatively unchanged, with 41 percent saying they believe prices will rise. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says sentiment will likely remain low until the number of homes for sale rises. “The lack of housing inventory is likely to remain a challenge for some time, and home purchase sentiment may continue to be suppressed as a result,” Duncan said. “As our forecast indicates, we believe it will be a couple years before home sales return to more normal, pre-pandemic levels.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down 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. Joel Kan, MBA’s vice president and deputy chief economist, says rates are now at a four-month low. “Mortgage rates declined last week with the 30-year fixed-rate mortgage falling to … the lowest level since August 2023,†Kan said. “Slower inflation and financial markets anticipating the potential end of the Fed’s hiking cycle are both behind the recent decline in rates.†Lower rates have boosted demand for mortgage applications, with the MBA’s Market Composite Index – which measures both purchase and refinance activity – up 2.8 percent from the week before. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

More often than not, home buyers are shopping for a new home because they have to be. Major life changes like marriage, starting a family, or a new job can mean it’s time to move regardless of what’s happening in the housing market. Other times, buyers have some flexibility. Maybe they’d like to move but can wait for more favorable market conditions. These days, there are a lot of buyers who’ve been on the fence for a while. Competition, higher prices, lack of inventory, and rising mortgage rates have had many buyers waiting for the right time. In fact, the vast majority of potential buyers surveyed last spring thought delaying their plans for a few months – or longer – could improve their chances of getting the right place at the right price. Six months ago, for example, a survey of prospective buyers found 85 percent were willing to wait for better conditions. But have they grown tired of waiting? Possibly. A more recent survey asked buyers again whether they’re willing to wait for a more favorable market. This time, however, it found the share of respondents who said yes was almost 25 percent lower than it was in the spring. (source)

December is the time of year when housing market experts release their forecasts predicting what they believe will happen in the year ahead. So far, market experts have generally been optimistic about conditions in 2024. And, according to one newly released forecast, one of the top reasons for their increased optimism is the likelihood that the inventory of homes for sale will improve. Why does that matter? Well, too few homes for sale has been a big frustration for today’s home buyers. Not only has it led to more competition for the homes that are on the market, it’s helped drive up their price. According to the forecast, when mortgage rates began to rise in 2022, many potential home buyers put their plans on hold. Now, with rate increases beginning to calm, homeowners may be ready to list their home and make the move they’ve been delaying over the past year or so. With additional inventory and steadier rates, affordability will improve and home buyers will finally get some relief. (source)

When a contract to buy a home is signed, that home’s sale is considered pending until it closes weeks later. The National Association of Realtors tracks pending sales because they’re considered a good indicator of future home sales numbers. After all, most contract signings will eventually lead to a closed sale. The NAR’s most recent Pending Home Sales Index found signings down 1.5 percent in October from the month before. Lawrence Yun, the group’s chief economist, says low supply is slowing signings. “Home sales are rising in places where more inventory is available,†Yun said. “Sales for properties above $750,000 were higher than a year ago, because there is more inventory at this price point than what we saw last October.†Similarly, newly built homes have also seen year-to-date increases due to rising construction activity. In other words, where there’s inventory, there are buyers, which means the overall lack of available homes for sale remains the primary factor holding home buyers back – even more than affordability challenges. (source)

Finding a home that fits your needs wouldn’t be difficult if money wasn’t a factor. But since most of us have to consider our budget before buying, finding a home can sometimes be challenging – especially in a housing market where costs are rising. That’s been the case for most of the past two years, as mortgage rates and home prices both continued to climb. So what’s in store for 2024? Well, according to the National Association of Realtors’ consumer website, affordability should start to improve next year, giving home buyers a bit of a break. Danielle Hale, the site’s chief economist, says there’s reason for optimism. “Our 2024 housing forecast reveals the green shoots we’ve been waiting to see in the housing market and should give buyers some optimism after a grueling few years,†Hale said. Among the improvements, the forecast sees lower mortgage rates in the new year, as well as softening prices. Together, that should result in lower costs for buyers. In fact, the typical monthly cost for a median-priced home is expected to be slightly less than $2,200 a month, after reaching almost $2,300 a month in 2023. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. It was the fourth decline in five weeks. Rates fell across most loan categories, including 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 5/1 ARMs and 15-year fixed-rate loans. Joel Kan, MBA’s vice president and deputy chief economist, says rates are now at a 10-week low. “Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed-rate dipping to … the lowest level in 10 weeks,†Kan said. “Rates have declined more than 50 basis points over the past six weeks, which has helped spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago.†Last week, demand for loans to buy homes was up 5 percent week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Fannie Mae’s Economic and Strategic Research Group releases a monthly outlook covering what the group believes is ahead for the economy and housing market. According to their most recent forecast, they see some improvement ahead for home buyers. In fact, the ESR group says they believe home sales will bottom out early next year before starting to climb again. The reason behind the rebound? Lower mortgage rates. “Housing has been and continues to be under serious affordability pressure, resulting in recessionary-level home sales activity,†Doug Duncan, Fannie Mae’s senior vice president and chief economist, said. “While many current owners with low mortgage rates will likely continue to be discouraged from listing their homes, we expect mortgage rates to trend modestly downward in 2024, which should help kickstart a gradual recovery in homes sales into 2024.†Fannie Mae also sees the new home market – both construction and sales – remaining resilient into the new year. (source)