Category: Uncategorized

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates continued their climb upward last week. In fact, rates were up from the week before across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says rising rates haven’t slowed demand for loans to buy homes. “The hot job market and rapid wage growth continue to support housing demand, despite the surge in rates and swift home-price appreciation,†Kan said. “However, insufficient for-sale inventory is restraining purchase activity.†The lack of homes for sale is especially challenging for first-time home buyers. For example, though purchase loan demand was down 3 percent last week, it fell 8 percent for FHA loans, which are more popular with entry-level buyers. Overall, mortgage application demand was down 6.3 percent last week, mostly due to a 10 percent drop in refinance activity. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

When choosing a place to live, you also have to choose whether you’re going to rent or buy. Of course, there are a number of reasons you might choose one over the other. For most of us, though, the decision will largely be financial. Buying a home requires a significant upfront investment and you need to have enough to cover a down payment, closing costs, etc., before you can buy. That may help explain a new analysis that found education level is a good predictor of whether or not a person will own a home. According to the data, among U.S. homeowners, 40 percent have attained a bachelor’s degree or higher and 30 percent have some college or an associate’s degree. By comparison, 23 percent of homeowners have a high school diploma and 7 percent have less than a high school education. That means the vast majority of homeowners have, at least, some higher education. But since the average income for a college graduate is more than twice that of those with a high school diploma or less, it seems income may ultimately be the best predictor of future homeownership. (source)

Success means different things to different people. There isn’t one fixed definition or measurement. But while that’s obviously true, there are certain hallmarks that have long been seen as key components of achieving the American dream. Owning a home is certainly one of them. And, according to a new survey, it continues to be. The survey found that homeownership was the symbol of economic prosperity Americans ranked highest, with 74 percent putting it above being able to retire, having a successful career, owning a car, having children, and getting a college degree. Its ranking was consistent across generations. In fact, it was the top choice among all respondents of any age, except those between the ages of 18 and 25, who ranked a successful career as their top choice. There are likely many reasons Americans continue to hold homeownership in such high regard. But the fact that 72 percent of homeowners said, if given the chance, they would buy their current house again is a pretty good indication stability, personal satisfaction, and happiness are as big a part of it as any financial or economic benefit. (source)

Every homeowner who’s selling their home wants it to attract buyers and sell for the highest possible price. That’s why they remove the clutter, fix any maintenance issues, plants some flowers and make sure their home looks its best before listing it. Makes sense. A good home won’t garner the same amount of interest if it’s presented poorly. But there are other considerations when selling a house. For example, the time of year matters. Homes sold in the winter may not sell as quickly, and for as much, as they would in the spring or summer. According to a recent analysis, even the day of the week makes a difference. In fact, the analysis found homes listed on a Thursday can sell for $1,100 more than if they were listed on a different day. Why? Well, busy buyers often don’t have time to go see available listings during the week. So, a home listed closer to the weekend, gives buyers time to arrange their schedule and plan a time to go out and see it. (source)

The S&P Case-Shiller Indices are considered among the leading measures of U.S. home prices. The index covers all nine Census divisions and is calculated quarterly. According to their most recent release, home prices began the year much the way they ended 2021. Double-digit increases were found in each category, with year-over-year gains slightly higher than the month before. Put simply, home prices continue to rise. Craig J. Lazzara, managing director at S&P, says they’re moving higher in markets nationwide. “The strength in home prices continues to be very broadly based,†Lazzara said. “All 20 cities saw price increases in January 2022, with prices in 16 cities accelerating relative to December’s report. January’s price increase ranked in the the top quintile of historical experience for 19 cities, and in the top decile for 17 of them.†Prices rose fastest in the South and Southeast, with Tampa and Miami trailing Phoenix for the nation’s fastest rising prices. Phoenix has led all cities for 32 consecutive months. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased again last week, moving higher for 30-year fixed rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increases continue the recent upward trend that has rates headed higher just as the spring home buying season gets underway. Fortunately, though, it doesn’t seem to have slowed buyers. Mike Fratantoni, MBA’s senior vice president and chief economist, says demand for loans to buy homes has held steady. “Even with the ongoing climb in rates, purchase application volumes were little changed last week,†Fratantoni said. “This is particularly auspicious, as we are now in the beginning of the spring home buying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market.†The MBA’s report found buyer demand for purchase loans increased 1 percent last week from the week before. (source)

In order to buy a house, you have to be approved to borrow enough money to pay for it. After all, not many of us have a couple hundred thousands dollars in cash lying around. So most buyers, before they start their home search, will have to talk to a lender to see whether they qualify for a mortgage. But the standards used to determine whether or not a buyer’s qualified aren’t fixed. There are times when getting a mortgage is harder and others when it’s easier. Because of this, the Mortgage Bankers Association’s Mortgage Credit Availability Index tracks whether standards are tightening or loosening from month to month. According to their most recent report, getting a mortgage got easier in February. In fact, Joel Kan, MBA’s associate vice president of economic and industry forecasting, says credit availability is at its highest point in months. “Credit availability increased to its highest level since May 2021, driven by growth in jumbo loan programs, as well as those that include allowances for ARMs and expanded credit score and LTV requirements,” Kan said. “In a period of rising mortgage rates, affordability challenges, and declining volume, lenders have made efforts to slightly broaden their product offerings.”

Last year’s housing market was fast-paced and competitive. Buyer demand was elevated, and available listings often had multiple offers after hosting a steady stream of interested home shoppers. So what should we expect this spring, as the sales season kicks into gear? According to one recent analysis of home showings, maybe more of the same. The analysis – which looked at the number of home tours per available listing in markets across the country – found that the number of markets averaging double-digit showings per listing was up 45 percent in February from last year at the same time. Cities with double-digit showing activity increased from 75 last year to 109 this year. The gains were widespread. Among the busiest markets, Nashville led the way, with a 43 percent year-over-year increase. Other busy markets included Orlando, Bridgeport, Conn., Dallas, Hartford, Sarasota, and Charlotte. Fortunately for buyers, relief may be on the way, as the number of homes for sale is expected to rise, which should help reduce competition for available homes. (source)

The National Association of Realtors’ Pending Home Sales Index measures the number of contracts to buy homes signed each month. Because it tracks signings and not closings, the index is a good indicator of future sales of existing homes. In February, it was down 4.1 percent, marking the fourth consecutive month transactions fell. Lawrence Yun, NAR’s chief economist, says the reason for the decline is simple. “Pending transactions diminished in February mainly due to the low number of homes for sale,†Yun said. “Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale.’†Fortunately, there are expectations that the inventory of homes for sale will improve this year, which will help slow price increases and offer buyers more options. However, those improvements will be gradual and home buyers in the coming months should still be prepared for a competitive market, where good listings attract multiple interested buyers.

There are a couple of reasons new home sales are important to watch. First, they account for just over 11 percent of all home sales. Secondly, they’re a leading indicator, since they are counted when a contract to buy is signed, rather than at closing. In other words, you can get a good feel for what’s ahead for the housing market by paying attention to new home sales. In February, according to numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, sales slowed, dropping 2 percent from the month before and 6.2 percent from where they were last year at the same time. That’s a sign that the housing market may be cooling off after a hot and competitive 2021. With mortgage rates edging higher and prices up significantly, there may be fewer buyers active in the market this year. But that may be good news for buyers who are still active, as fewer buyers means less competition and slower price increases. Along with an expected increase in new home construction this year, reduced buyer demand could mean a better balanced market for home buyers still looking for a home to purchase. (source)