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According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down from the week before for 30-year fixed-rate loans with conforming balances and loans backed by the Federal Housing Administration. It was the eighth-straight week of declines. Joel Kan, MBA’s vice president and deputy chief economist, says demand for loan applications jumped to a two-year high as a result. “Mortgage applications increased to their highest level since July 2022, boosted by a 20 percent increase in refinance applications after a large increase the prior week,” Kan said. Refinance activity is now 175 percent higher than it was at the same time last year. Purchase demand, on the other hand, is just 2 percent higher year-over-year, after a 1 percent increase last week. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Falling mortgage rates have created a buzz among potential buyers but rates aren’t the only market factor trending in the right direction. According to the latest release from the S&P Case-Shiller Home Price Indices, home price increases are also offering buyers a bit of a break. The numbers show prices – while still climbing – are doing so at an ever-slower pace. In fact, the numbers show the National Home Price Index up 5 percent year-over-year through the end of July, down from a 5.5 percent increase the previous month. As always, where you’re looking to buy will determine just how quickly prices are moving. “Regionally, the Northeast remains the best performing market, with New York the top performer for three months running, followed by the Midwest region,” Brian D. Luke, S&P’s CFA, says about where prices are climbing fastest. “The South reported the slowest gains regionally but includes five of the seven best performing markets since 2020.” (source)

Every month, Fannie Mae’s Economic and Strategic Research Group releases a commentary covering what the group sees ahead for the housing market and economy. Its forecast looks at factors like mortgage rates, home prices and economic growth, then estimates where they’re headed through the end of the year and into the next. In its September release, the group says mortgage rates have improved considerably but have yet to move home buyers, who may be holding out for even better conditions. “Although mortgage rates have fallen considerably in recent weeks, we’ve not seen evidence of a corresponding increase in loan application activity, nor has there been an improvement in consumer home buying sentiment,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, says. “We think it’s likely that many would-be borrowers are waiting for affordability to improve even further, and that some may be anticipating additional declines in mortgage rates given expectations that the Fed will lower the federal funds target rate.” (source)

After five consecutive monthly declines, construction of new, single-family homes spiked in August, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. The spike included a 15.8 percent increase in single-family housing starts – which measure the number of new homes that began construction during the month. It also included a 2.8 percent increase in permits to build new homes. The gains come at a time when other housing indicators are improving and could be a sign that builders are seeing more traffic now that conditions have eased in favor of home buyers. They may have also been influenced by a homebuilding rebound in the South, after Hurricane Beryl temporarily disrupted activity in July. Whatever the case, a rising number of new homes under construction is encouraging, as it helps balance the market and keeps home prices steady. (source)

Buying a home isn’t something you do in an afternoon. It takes several weeks, maybe months. That could explain why, despite news of improved buying conditions, the latest home sales numbers from the National Association of Realtors show sales dropping 2.5 percent in August. Why would sales be slowing at the same time conditions are getting better for buyers? Well, because August numbers reflect the closed sales of buyers who began shopping for a house many weeks earlier, while buyers motivated by falling rates in August will close sales in the weeks ahead. Lawrence Yun, NAR’s chief economist, says sales should move higher in coming months. “Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” Yun said. Mortgage rates have now been falling for most of the past two months and the number of available homes for sale – according to the NAR – is up 22.7 percent from last year at the same time. That’s good news for both fall home buyers and future sales numbers. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down from the week before 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. Joel Kan, MBA’s vice president and deputy chief economist, says rates are now at a two-year low. “Application activity was up significantly last week, as market expectations of a rate cut from the Fed pulled mortgage rates lower,” Kan said. “The 30-year fixed mortgage rate … is now at its lowest since September 2022 and is more than a full percentage point lower than a year ago.” As a result, demand for loan applications skyrocketed, with refinance activity up 24 percent and purchase demand 5 percent higher than one week earlier. The MBA’s weekly survey has now been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The National Association of Home Builders conducts a monthly survey to gauge builder confidence in the market for newly built homes. Its Housing Market Index scores builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In September, the index rose two points to 41, breaking a streak of four consecutive monthly declines. Carl Harris, NAHB’s chairman, says the reason is simple. “Thanks to lower interest rates, builders now have a positive view for future new home sales for the first time since May 2024,” Harris said. “However, the cost of construction remains elevated relative to household budgets, holding back some enthusiasm for current housing market conditions.” Survey results do show builders more optimistic about the future than current conditions, with the component measuring expectations for the next six months up four points and the component measuring current conditions up only one point from last month. (source)

Despite recent affordability challenges, Americans never stopped wanting to buy a home. Even as prices soared and rates climbed higher, the desire for homeownership remained strong. Now, with the housing market beginning to balance, the time may be right for buyers who paused their plans, waiting for a better deal. Why? Several reasons. Mortgage rates, for one. Average rates have now fallen for several consecutive weeks and are about a point lower than they were earlier this year. Inventory has also improved, offering home shoppers more choices, less competition, and a better chance at avoiding a bidding war. Additionally, the increasing number of homes for sale helps keep available options on the market longer, giving buyers more time to make a smart choice and a solid offer. Altogether, it could add up to a hotter than normal fall housing market, as buyers look to take advantage of the improved conditions. (source)

Home prices are a hot topic after years of skyrocketing growth. Double-digit annual increases were common in most markets during the pandemic and, though they’ve slowed considerably, prices are still moving upward in most markets. But what should home buyers – and sellers – expect in the months ahead? Well, Fannie Mae’s Home Price Expectations Survey polls industry experts each quarter and gets their read on where they think prices are headed. According to the most recent release, Fannie Mae’s panel raised their expectations for 2024, now saying they expect prices to be up 4.7 percent for the year, rather than the 4.3 percent they predicted last quarter. As for 2025, they expect prices to gain an additional 3.1 percent next year. The national appreciation rate since 1987, according to the Case-Shiller Home Price Indices, is 4.8 percent. (source)

Credit availability isn’t typically among home buyers’ top concerns – but it matters. Lending standards and the availability of loan programs affect how easy or difficult it is to get approved for a loan. When credit is tight, for example, prospective borrowers will need to have their finances in order more so than they would if it were looser. That’s why the Mortgage Bankers Association keeps a monthly measure of how tight or loose credit is with their Mortgage Credit Availability Index. Any increase in the index lets borrowers know credit has loosened, while decreases mean availability has tightened. According to the most recent release, the index rose another 1 percent in August, continuing recent gains and providing better access to borrowers. Joel Kan, MBA’s vice president and deputy chief economist, says credit availability is at a two-year high. “Credit availability increased in August, with the conventional credit index reaching its highest level since July 2022,” Kan said. The MBA’s index has now shown month-over-month increases for eight consecutive months. (source)