mortgage rates Archives

Confidence In Housing Market Rebounds

Fannie Maeâ€™s Home Purchase Sentiment Index measures Americansâ€™ perceptions of the housing market, including whether they feel itâ€™s a good time to buy or sell a house and their expectations for home prices and mortgage rates over the next year. In September, the Index found consumers are more secure in their jobs and more likely to feel now is a good time to enter the market. â€œThe HPSI returned near its record high this month, driven primarily by improvement in attitudes about selling a home and strengthening home prices,â€ Doug Duncan, Fannie Maeâ€™s senior vice president and chief economist, said. â€œWith consumersâ€™ expectations for rental price increases continuing to outpace their expectations for home price growth, many consumers may view homeownership as a more attractive option.â€ In fact, 64 percent of respondents said they felt like it was a good time to buy a house. Also in the report, the vast majority of Americans say they donâ€™t fear losing their job and nearly a third reported that their household income has gone up significantly over the past year. The combination of increasing financial security and an attractive environment for potential home buyers and sellers indicates that the housing market should see continuing gains in the months ahead. MoreÂ Â here.

Lenders Say Credit Standards Have Eased

Fannie Maeâ€™s quarterly Mortgage Lender Sentiment Survey polls senior executives to assess their views and outlook on a number of topics related to the mortgage market. The results provide an insiderâ€™s perspective on credit standards, demand, the economy, and more. According to the most recent survey, when asked whether their lending organizationâ€™s credit standards have eased, tightened, or remained unchanged over the past three months, the gap between those saying theyâ€™ve eased and those reporting stricter standards increased to 20 percent, a new survey high. Doug Duncan, senior vice president and chief economist at Fannie Mae, said it was the first time in seven quarters that there was a pronounced increase in the share of lenders reporting on net an easing of credit standards. â€œThis is a significant result in light of public discourse on credit availability and standards,â€ Duncan said. â€œOverall, we expect that lendersâ€™ tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion.â€ MoreÂ here.

New Home Sales Beat Expectations In August

Sales of newly built single-family homes rose 5.7 percent in August, according to new estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. The improvement puts new home sales 21.6 percent above last yearâ€™s level and represents the fastest sales pace in seven years. After falling in June, sales have rebounded strongly. In fact, Augustâ€™s report includes an upward revision of Julyâ€™s estimate, which was initially reported as a 5.4 percent increase. It also surpasses economistsâ€™ expectations for the month. New home sales are an important indicator of â€“ not only the health of the housing market â€“ but also the overall economy. Strengthening sales are an indication of increasing economic activity, as well as a more stable job market. But though this summerâ€™s sales gain can, in part, be attributed to improved employment conditions, it is also fueled by mortgage rates that remain low by historical standards. Also in the report, the median sales price of new houses sold in August was $292,700; the average sales price was $353,400. At the current sales pace, there was a 4.7-month supply of new homes available for sale. MoreÂ here.

Potential Rate Hike Won’t Derail Housing

For months, speculation that the Federal Reserve would begin to raise interest rates has loomed over the housing market. The rumored rate hike has spurred some potential buyers to enter the market earlier than they mayâ€™ve planned but itâ€™s also led many to theorize that higher mortgage rates would doom the housing marketâ€™s recent progress. According to a survey conducted by Reuters of 22 top economists, however, the housing market is now strong enough to endure a gradual increase in mortgage rates. In fact, all but two of the 22 said they felt rising rates would not hamper sales, citing job creation and growing demand for houses among younger buyers as reasons demand would not be affected. â€œThe recent strength of housing activity suggests the market is well placed to cope with a gradual rise in interest rates,â€ Capital Economics economist, Matthew Pointon, told Reuters. â€œRising rates will also be accompanied by an improving labor market and gradually loosening of credit conditions.â€ In addition, the surveyed economists felt home price increases wouldnâ€™t be big enough to discourage first-time home buyers but will be enough to encourage current homeowners to put their homes up for sale, which could help address current inventory issues in many markets across the country. MoreÂ here.

September May Be Best For Buyers

Spring and summer are known to be the hottest times of year for home shoppers and sellers. But, according to a recent article from Realtor.comâ€™s chief economist, Jonathan Smoke, September may actually be the best month for buyers to sign a contract to buy a house. Smoke says prospective buyers will find more choices and less competition if theyâ€™re looking to buy now. â€œNormally inventory peaks in August and begins to slow as the nights grow longer,â€ Smoke says. â€œBut this year the typical seasonal decline will start a bit later. There will be more choices in September than any other month in 2015.â€ And, since the school year has started, overall demand will be down, which means prospective buyers will have less competition than they would earlier in the year. Also, fewer buyers and more homes available for sale means upward pressure on prices will start to ease, giving potential buyers an edge. Finally, Smoke argues that now is the best time to buy because mortgage rates remain historically low, which makes affordability conditions even more favorable for prospective buyers. MoreÂ here.

Climbing Prices Top List Of Buyer Concerns

Buying a home requires a little forethought. It is, after all, the largest purchase most people will ever make. So thinking things through before taking the plunge is always a good idea. But what issues weigh most heavily on the minds of potential home buyers? According to a recently released survey, todayâ€™s buyers are most concerned about rising home prices. In fact, nearly 27 percent of respondents named affordability their biggest concern â€“ with too much competition from other buyers running a distant second at 17 percent. The results highlight a change from last year. Although prices, competition, and inventory retain their hold on the top three positions, rising mortgage rates have fallen from the top five and were named by just 5 percent of participants. Still, despite fewer worries about a spike in mortgage rates, a growing number of home buyers have legitimate concerns about price increases, especially first-time home buyers. Among first-time buyers, 31 percent named prices their top concern. On the other hand, some issues that may have ranked higher in the past appear to have receded from buyersâ€™ minds. For example, worries about the economy and job security, difficulty getting a loan, and confusion about the buying process were each named by just 3 percent of prospective buyers. MoreÂ here.

Majority Of Recently Sold Homes Affordable

During the second quarter of this year, 63.2 percent of the new and existing homes sold were affordable to families earning the U.S. median income of $65,800, according to the National Association of Home Builders Housing Opportunity Index. And though that’s down from 66.5 percent in the first quarter, David Crowe, NAHB’s chief economist, says conditions are still favorable. “Though affordability edged slightly lower in the second quarter, the HOI remains well above 50, where half the households can afford half the homes sold,” Crowe said. “Low mortgage rates, pent-up demand and continued job growth should contribute to a gradual, steady rise in housing throughout the year.” The slight drop in affordability is largely due to the fact that home prices continue to rise. In fact, the national median home price increased from $210,000 in the first quarter to $230,000 in the second quarter. On the other hand, average mortgage rates actually moved lower during the same period, which should help offset some of the effects of continued price gains. More here.