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According to the Mortgage Bankers Association’s weekly applications survey, average mortgage rates fell for the fifth consecutive week last week. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances. They also fell for loans backed by the Federal Housing Administration. The downward trend over the past several weeks has led to increasing demand for mortgage applications, with both purchase and refinance demand moving higher last week. Joel Kan, MBA’s vice president and deputy chief economist, says activity is beginning to rise. “Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of lower rates,†Kan said. “Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market.†Overall, demand for mortgage applications rose 7.4 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)

Buying a home has become more affordable, according to new numbers from the Mortgage Bankers Association. The MBA’s Purchase Applications Payment Index – which measures how mortgage payments change from month to month – found that the median payment fell 2.9 percent at the end of last year, dropping from $1,977 in November to $1,920 in December. Edward Seiler, executive director of MBA’s Research Institute for Housing America, says affordability looks like it’ll continue to improve as spring approaches. “With inflation cooling slightly, MBA expects both mortgage rates and home-price growth to soften, which along with cooling inflation, should help bring more prospective buyers into the market during the spring home buying season,†Seiler said. The Index found payments for FHA loans were also down, falling to $1,602 in December from $1,631. For borrowers applying for lower-payment mortgages, payments were down to $1,279 at the end of the year. (source)

When mortgage rates spiked last year, many potential home buyers put their plans on hold. But hesitant home buyers may want to rethink their position now that the winter housing market has seen mortgage rates fall a full percentage point from where they were last November. After all, newly released research shows the decline means up to 3 million more Americans can now afford a $400,000 loan. Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, says lower rates have opened up the market to a growing number of potential buyers. “There is finally light at the end of the tunnel for many Americans, as they now earn more than the income needed to purchase a mid-priced home,†Evangelou said. “Many Americans earn about $5,000 more annually than the qualifying income needed to purchase a home.†Evangelou believes, with inflation improving and the Fed indicating smaller rate increases in the future, the improvements should hold and keep mortgage rates steadier in the months ahead. (source)

It’s been a long time since home buyers had much negotiating power. Conditions have favored sellers for years now. But a combination of rising inventory and higher mortgage rates began to turn some markets last year. Now, it’s 2023, and one new analysis says home buyers may gain some ground by year’s end. The analysis – which looked at the 100 largest housing markets in the country to determine which favor buyers, which favor sellers, and which are neutral – found a rising number of markets where buyers are seeing improved conditions. Overall, 13 markets favored buyers, 43 were neutral, and 44 favored sellers. But, if things play out as expected, those numbers will change even further by summer. Expectations are that the spring market will remain challenging, with inventory still low and buyer activity increasing. But, as the year goes on and the number of homes for sale rises, home buyers will find more favorable conditions, particularly into summer and early fall. By the end of the year, 34 markets are forecast to be buyers’ markets. (source)

Equity is the difference between what your home is worth and what you owe on your mortgage. And these days, homeowners have a lot of it. In fact, according to ATTOM Data Solutions’ most recent U.S. Home Equity & Underwater Report, nearly 50 percent of mortgaged properties were considered equity rich at the end of last year. That means the combined amount of loan balances secured by those properties was no more than 50 percent of their value – which is another way of saying the property is worth a lot more than what its owner owes on it. That’s a good situation to be in and, these days, most homeowners are doing pretty well. According to the report, a full 94 percent of homeowners have, at least, some equity in their home. Bob Barber, ATTOM’s CEO, says, the past few years have been good for building equity but the gains are likely to slow. “[It] depends on a lot of factors, including where interest rates go,†Barber said. “But, for now, it looks like the run up in wealth flowing from owning homes has stalled along with the market.†(source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down for 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. It was the fourth consecutive week mortgage rates improved. Joel Kan, MBA’s vice president and deputy chief economist, says home buyers are regaining purchasing power. “Purchase activity is expected to pick up as the spring home buying season gets underway, bolstered by lower rates and moderating home-price growth,†Kan said. “Both trends will help some buyers regain purchasing power.†But while mortgage rates have fallen almost 40 basis points over the past month, demand for loans to buy homes remained slow last week, falling 10 percent from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The S&P Case-Shiller Home Price Index is among the most closely watched measures of U.S. home prices. The index, which tracks both monthly and annual changes in home values, has been collecting data for nearly 30 years. According to the most recent release, home prices continue to slow in metro areas across the country. Craig J. Lazzara, managing director at S&P, says November marked five consecutive month-over-month declines. “November 2022 marked the fifth consecutive month of declining home prices in the U.S.,†Lazzara said. “ These declines, of course, came after very strong price increases in late 2021 and the first half of 2022. Despite its recent weakness, on a year-over-year basis the National Composite gained 7.7 percent, which is in the 74^th percentile of historical performance levels.†Regionally, year-over-year gains were not evenly distributed, with West Coast cities seeing smaller increases than cities in the South where prices continue to see double-digit gains from year-before levels. (source)

There’s increasing evidence that we may have already past the housing market’s low point. Recent data shows mortgage rates falling and buyer activity rising as we approach the spring home-buying season. The latest evidence is the National Association of Realtors’ Pending Home Sales Index. The Index – which measures the number of contracts to buy homes signed during the month – showed a 2.5 percent improvement in December over the month before. It was the first increase following six months of declines. Lawrence Yun, NAR’s chief economist, says the market is stabilizing. “This recent low point in home sales activity is likely over,†Yun said. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.†Regionally, index results were mixed, with the West and South showing significant improvement, while the Northeast and Midwest still saw falling contract activity. (source)

New home construction is an important part of balancing the housing market. When inventory is low and prices are rising, building more new homes can help level the imbalance and provide better affordability conditions for buyers of all types of homes. But builders don’t build more homes unless there are interested buyers. That’s why keeping an eye on new home sales can help buyers get a feel for what’s happening in the overall market. If new home sales are rising, builders are more likely to build more homes, which helps inventory and ultimately home buyers. So what’s happening now in the new home market? Well, according to the latest numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales rose 2.3 percent in December, matching economists’ expectations for the month. But while the month-over-month improvement is encouraging, sales are still down significantly from year-before levels, mostly due to the increase in mortgage rates that slowed buyer demand last year. (source)

Buying a house isn’t a short-term living arrangement. Typically, if you’re buying, you’re planning to stay a while. But how long should home buyers expect to live in the house they purchase? Well, conventional wisdom says you should expect to live in the house you buy for at least five years. Recently, though, Americans have been staying in their homes longer before selling and moving somewhere new. In fact, between 2019 and 2021, the typical homeownership tenure was cited as being somewhere between eight and 13 years. For comparison, in the early 2000s, it got as low as four and a half years. These days, it’s getting shorter again. In fact, according to ATTOM Data Solutions, home sellers who sold during the fourth quarter of 2022 had owned their homes an average of 5.85 years. That’s the third shortest tenure since 2012 and represents a growing trend, with a majority of metro areas showing tenures down. (source)