According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, with rates for 30-year fixed-rate mortgages with conforming loan balances at their highest level in more than seven years. But, despite the increase, mortgage application volume – which includes both buyers requesting loans to buy homes and refinance activity – actually increased from the week before. Could it be that buyers are looking to get into the market before mortgage rates move any higher? Well, purchase loan demand was virtually flat from one week earlier and is now only four percent higher than at the same time last year, when rates were lower. However, the fact that application demand didn’t fall as rates hit a multi-year high indicates that Americans may be hoping to take advantage while they’re still lower than historically normal. Joel Kan, an MBA economist, says rates, once again last week, were driven by positive economic data. “As markets received various pieces of data indicating economic strength such as wage growth, inflation, and jobless claims, Treasury rates were up over the week,” Kan told CNBC. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
There are two reasons home buyers typically have to pay more for a house on the water. The first is that people want to live on the water. It’s a desirable location. Secondly, there are a limited number of houses with water access. And when you combine high demand and low supply, you usually have a recipe for higher prices. But new research shows that waterfront property isn’t selling at as high a premium this year. In fact, waterfront homes in the first quarter sold for a 36 percent premium, which is the lowest level since 2002. By comparison, the average premium since 1996 is 41 percent and in 2012 the premium was as high as 54 percent. In other words, the difference in price between homes on the water and those further inland is lower than normal. But since having an ocean or lake view hasn’t become any less desirable, what might be behind this trend? Well one explanation is that a lower overall number of homes for sale has helped raise prices for homes all over, which has narrowed the price gap between waterfront and inland homes. More here.
Home prices have been climbing for the past few years. And while that has presented affordability challenges for buyers in some markets, it’s also produced big gains for homeowners who’ve sold a home recently. Take, for example, new estimates showing that, nationally, the typical home seller, after living somewhere for eight years, made nearly $40,000 on their home sale. That’s good news for homeowners. And, in some markets, the sales gain is even higher. Homeowners in the Dallas-Fort Worth area saw a median sales gain of $56,297 after just 7.4 years and, in San Jose, sellers’ median price gain was nearly $300,000. But while that may be encouraging for anyone who hopes to sell soon, there is a flip side. Because many home sellers hope to use any money they make on their home sale as a down payment for their next home, the amount gained on a sale may not seem as significant, especially if you’re buying a home in the same market and price range. More here.
Sales of newly built single-family homes surged unexpectedly last month, according to new data released by the U.S. Census Bureau and the Department of Housing and Urban Development. In fact, sales were up nearly 19 percent from the month before and 17 percent over the same time last year. The increase was a surprise and far surpassed economists’ expectations, which called for a slight decline from August’s pace. All in all, any improvement in new home sales is encouraging news for the housing market. That’s because, demand for new homes spurs new residential construction, which helps alleviate upward pressure on prices by adding to the number of homes available for sale. In a competitive market, where there are more buyers than homes to buy, new home construction is among the quickest remedies for inventory shortages. However, though the gains are encouraging, new home sales data tends to be volatile from month-to-month and isn’t always reflective of the overall trend. Also in the report, the median sales price of new houses sold in September was $319,700. The average sales price was $385,200. More here.
These days, determining the affordability of buying a home isn’t such a simple calculation. There are always a lot of variables to consider – including prices, mortgage rates, wages, and local factors – but today’s housing market contains a number of contradictions that may make it even more difficult for potential buyers to figure out. For example, home prices have recently been making a lot of news, mostly because they’ve regained much or all of the value lost following the housing crash. At the same time, though, mortgage rates have remained just above historic lows for the past several years. In other words, if you live in an area where home prices have been slower to rebound, low mortgage rates likely mean homes are still a good deal in your neighborhood. On the other hand, in some areas – where home prices have pushed beyond previous highs and low inventory is limiting available choices – favorable mortgage rates make less of an impact. Sean Becketti, Freddie Mac’s chief economist, says buying is affordable for the average household, though challenges remain. “Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices,” Becketti said. “Nevertheless, hurdles to homeownership arise from the difficulty of finding a house.” More here.
Just after last year’s election, average mortgage rates began increasing. The rise was largely seen as a sign of things to come. However, rates have now begun dropping from their post-election highs. In fact, according to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates for 30-year fixed-rate loans with conforming loan balances are now at their lowest level since last November. Lynn Fisher, MBA’s vice president of research and economics, told CNBC last week’s drop was largely related to the French election. “The drop was driven by continued investor concerns about the French election, though Sunday’s first-round voting results apparently have alleviated some investor fears,” Fisher said. Whatever the case, falling mortgage rates boosted the number of homeowners seeking to refinance. The MBA’s refinance index rose 7 percent from the previous week. The purchase index, which measures the number of prospective borrowers applying for loans to buy homes, was unchanged from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
Home buyers, through the years, tend to value the same things. It makes sense. Though styles may vary and specific preferences may change, at the end of the day, we all want the same things out of our homes. Generally speaking, it all comes down to storage, space, and a sense of security. This year is no different. For example, a newly released survey of hopeful spring home buyers found that privacy was the top goal cited when asked what they valued most. Privacy even beat out family needs, which came in a close second. As for storage and space, garages and backyards were also near the top of the priorities list for most buyers. Demographically, younger buyers were more likely to want a large yard, while garages were particularly popular with buyers over the age of 55. Either way, it’s clear that this year’s house hunters have common needs. There is one need, however, that buyers share more than any other. When asked which room was most important to them, 80 percent of respondents named the kitchen. For obvious reasons, the kitchen is consistently ranked high atop buyers’ wish lists. After all, no matter how young or old a buyer is, they need to eat – which is why a good kitchen is always a draw for home shoppers. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, the size of the average home loan has reached a record high. And, since the survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications, that’s saying something. But, though the increasing size of the average mortgage may seem like the natural result of rising home prices, it actually has more to do with the fact that there has been more buying activity at the higher end of the real-estate market recently. In short, there are more expensive homes on the market than there are affordable homes to buy. As inventory picks up on the lower end of the market, the size of the average mortgage will likely moderate. Also in the report, mortgage rates were relatively flat from the week before, with little change seen among 15-year fixed-rate mortgages or 30-year fixed-rate loans with both conforming and jumbo balances. Loans backed by the Federal Housing Administration saw the biggest change, falling from the week before. Lynn Fisher, MBA’s vice president of research and economics, says the market was fairly steady last week. “Markets appeared to hit pause last week, with little new information emerging about upcoming administrative or legislative policy changes,” Fisher told CNBC. More here.
The Mortgage Bankers Association’s Weekly Applications Survey has been conducted every week since 1990 and covers 75 percent of all retail residential mortgages. In other words, it’s a pretty reliable gauge of where mortgage rates and application demand are headed. According to their most recent release, mortgage rates fell last week 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 mortgages. The decline brought rates to their lowest level in three weeks. Lynn Fisher, MBA’s vice president of research and economics, told CNBC markets were adjusting last week. “Markets adjusted expectations last week as attempts to repeal and replace the Affordable Care Act stalled and bond yields declined,” Fisher said. “This pushed mortgage rates down for the first time in three weeks.” But though average rates were down, demand for mortgage applications was relatively flat from the week before. In fact, overall mortgage application activity was down less than 1 percent from the week before. Still, demand for loans to buy homes – which is a good indicator of future sales – was up 4.8 percent over last year at the same time. More here.
Demand for home loans dropped last week, according to new figures from the Mortgage Bankers Association. The MBA’s Weekly Applications Survey – which tracks mortgage rates and application demand – showed a 2.7 percent decline in the number of Americans requesting applications for home loans. This time, however, the drop wasn’t related to a significant increase in mortgage rates. In fact, average rates were unchanged for 30-year fixed-rate loans with conforming loan balances, down for jumbo loans, and up only slightly for FHA and 15-year fixed-rate loans. In other words, mortgages rates were relatively steady from the week before. However, they are up from where they were last fall. Because of this, Mike Fratantoni, MBA’s chief economist, says home buyers are beginning to turn to adjustable rate mortgages. “Home buyers in a strong housing market are looking for ways to extend their purchasing power and ARMs are one way to do that,” Fratantoni told CNBC. Last week, adjustable rate mortgages increased to 9 percent of total application demand. But though that’s the highest it’s been in nearly three years, it’s still far below what it was before the housing crash, when it hit a peak of 35 percent. The MBA’s weekly survey covers 75 percent of all retail residential mortgage applications and has been conducted since 1990. More here.