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Market Movement Sends Mortgage Rates Down


According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The drop marks the second-straight week-over-week decline and follows a period, after the election, when mortgage rates rose for several consecutive weeks. Lynn Fisher, MBA’s vice president of research and economics, says markets are still adjusting. “Ten-year Treasury yields fell the week following New Year’s Day as markets continue to adjust their expectations about the incoming administration and Federal Reserve policy,†Fisher told CNBC. Typically, mortgage rates follow the yield on the U.S. 10-year Treasury. Despite the recent volatility, though, mortgage rates are still just slightly higher than they were at the same time last year. Also in the report, as a result of mortgage rates moving lower, both refinance and purchase activity was up from one week earlier – with the Purchase Index up 6 percent from the previous week. The MBA’s weekly applications survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More  here.

A glowing red arrow pointing downwards with text about mortgage rates falling.

Survey Finds Americans In The Mood To Buy


There are an endless number of reasons you might decide to buy a home at any particular time in your life. Whether you just got a new job on the other side of town or are looking for a place closer to family, the motivation behind a move is usually very personal. But there are economic factors at play, as well. Your financial situation, optimism about the future, and perception of the market can also influence a decision to stay where you are or pack your belongings. Fannie Mae’s monthly Home Purchase Sentiment Index looks at how Americans are feeling about buying a home, the real estate market, and their personal economic outlook. In December, the overall index fell slightly from the month before, though the number of Americans who said they thought it was a good time to buy a house was up from November. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says there’s been an increase in economic optimism recently but whether it carries through the rest of the year is uncertain. “A spike in economic optimism in the immediate aftermath of an election is typical,†Duncan said. “Whether consumers will sustain this level of optimism into 2017 remains unclear … If this optimism comes to fruition, it should translate into stronger income growth and increased job security for consumers – the two HPSI components that could help support housing sentiment this year.†More here.

A large two-story blue house with white trim under a cloudy sky.

The Top Spots For Buying A Second Home


Buying a second home is a common dream. Whether you want a place at your favorite vacation spot or a getaway close to home, it’s fun to imagine the possibilities. And, according to recent estimates from the National Association of Home Builders, millions of Americans are doing more than imagining them. There are 7.5 million houses that are being used as second homes across the country. That’s 5.6 percent of the nation’s housing stock. But where are the most popular locations for people looking to buy a second home? Well, not surprisingly, the counties that contain the largest share of second homes are mostly rural and scenic with low populations. Hamilton County, NY topped the list with 79.3 percent of homes classified as second residences. Forest County, PA, Rich County, UT, Alpine County, CA, and Daggett County, UT rounded out the five counties with the highest share of second homes. However, when you break down the data based on the number of second homes in any given county – rather than the percentage – the top 10 follows a less rugged path. In fact, warm weather counties near metro areas lead the list, which includes Maricopa County, AZ, Palm Beach County, FL, Lee County, FL, Los Angeles County, CA, Broward County, FL, and Riverside County, CA among the top 10. More here.

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Pending Home Sales Down In November


When an offer is accepted on a house, the closing process begins. During this time, the sale of that home is considered pending because it is under contract but not yet sold. The National Association of Realtors’ Pending Home Sales Index tracks these transactions because they are a good indicator of future sales of existing homes. In November, the index fell 2.5 percent from the month before. Lawrence Yun, NAR’s chief economist, says low inventory and higher rates affected sales during the month. “The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election,†Yun said. “Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract.†So what does this mean for affordability conditions in 2017? Well, according to Yun, the effects of increasing mortgage rates should be subdued a bit by growing wages and a healthy job market. The more Americans feel secure with their jobs and income, the more likely they’ll be to enter the market regardless of interest rate increases. More new home construction could also help relieve affordability pressure by adding for-sale inventory to markets where there are more buyers than available homes, which would help slow price increases. More here.

A real estate pending sale sign in front of a suburban house.

Home Price Increases Show Signs Of Slowing


Among the many different indexes tracking home prices across the country, the S&P Case-Shiller U.S. National Home Price Indices is considered the leading measure. Its nearly three decades of historical data make it a trusted source for gauging home price trends. According to the most recent release, the national index – which covers all nine U.S. census divisions – found home prices up 5.6 percent from where they were last year at the same time. But despite the annual gains, month-over-month results show values relatively flat from one month earlier. In fact, compared to the month before, national home prices rose less than 1 percent in October. That suggests home price increases are beginning to slow, which could be good news for buyers who are concerned about the recent upswing in mortgage rates. But, though prices may be showing signs of slowing, David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says they’re still rising faster than incomes. “Home prices and the economy are both enjoying robust numbers,†Blitzer says. “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal incomes.†More here.

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November New Home Sales Beat Expectations


Estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development show new home sales in November increased 5.2 percent from the month before. The improvement exceeded economists’ expectations and pushed sales 16.5 percent above last year’s level. Analysts believe the recent spike in sales of both new and existing homes may be due to the fact that mortgage rates have been rising over the past few weeks. Home buyers who may have otherwise waited until spring to buy a house may be shopping for a home this winter in hopes of locking in a lower mortgage rate. Whatever their motivation, though, new home buyers weren’t equally represented across the country. In fact, regional results show sales flat in the Northeast and down 3.1 percent in the South. On the other hand, new home sales were up 7.7 percent in the West and surged 43.8 percent in the Midwest. Also in the report, the number of new homes for sale rose 1.6 percent to the highest level since 2009. This is good news for prospective buyers, as an increasing number of new homes for sale could begin to relieve upward pressure on home prices, which would help counteract the impact higher mortgage rates have on affordability. More here.

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Home Sales Hit Fastest Pace Since 2007


Sales of previously owned homes rose for the third consecutive month in November, reaching their highest sales pace since February 2007. The 0.7 percent gain in November put home sales 15.4 percent above where they were at the same time last year. Lawrence Yun, NAR’s chief economist, says the housing market has been helped by a healthy job market and the expectation that mortgage rates would rise. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,†Yun said. “Furthermore, it’s no coincidence that home shoppers in the Northeast – where price growth has been tame all year – had the most success last month.†In fact, regional results show the Northeast saw an 8 percent improvement in November, while the South, Midwest, and West were relatively flat from the previous month. Also in the report, the typical home for sale last month was on the market 43 days, which is considerably faster than last year when homes stayed on the market an average of 54 days. More here.

Close-up of a red 'For Sale' sign with realty company details.

Home Buyers Come Out Despite Higher Rates


According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose yet again last week. In fact, rates were up across all loan categories, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But despite higher rates, the number of Americans requesting applications for home loans rose from the week before. Michael Fratantoni, MBA’s chief economist, told CNBC that application demand may have bumped up in anticipation of the Fed raising interest rates last week. “Mortgage rates increased at least partially as a result of the Federal Reserve’s rate hike and move to a slightly more hawkish stance,†Fratantoni said. “Borrowers may have gotten applications into their lender in advance of the FOMC announcement, as most observers anticipated an increase in the Fed’s rate target at the December meeting.†Still, though the Fed did raise rates, average mortgage rates are still well below their historical norm – meaning there are still opportunities for homeowners looking to refinance or buyers hoping to lock in a low rate. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

Close-up of a mortgage document section.

Mortgage Lenders Say Easier Credit Ahead


Mortgage lenders surveyed by Fannie Mae in November say credit standards across all loan types eased during the previous three months and should continue to over the next quarter. The fourth quarter 2016 Mortgage Lender Sentiment Survey found lenders concerned about recent mortgage rate increases but generally optimistic about the availability of mortgage credit. Looser credit is good news for prospective home buyers who may be concerned that they won’t be able to qualify for a mortgage, as it generally means lending requirements become more lenient. But despite credit standards loosening, Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the recent spike in mortgage rates presents a challenge after years of interest rates hovering just above record lows. “Rates could slowly unwind in coming quarters, reversing some of the expected decline in volume,†Duncan said. “However, the potential normalization of interest rates after a sustained period of strong refinancing volumes presents the biggest business challenge facing mortgage lenders in some time.†In other words, there’s no telling if rates will stay up but, if they do, it could affect the number of Americans entering the mortgage market in the coming months. More here.

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Builder Survey Hits Highest Level In 11 Years

There are a number of perspectives from which you could view the housing market. That’s why there are surveys gauging the attitudes of buyers and sellers, as well as Realtors, mortgage lenders, and builders. Each has an unique take on the real estate market that is based on their specific role. For example, an agent may have a very different understanding of their local market than the average home buyer, if only because of their experience and expertise. Builders are considered an important measure of the market because they have a ground-level view of how many people are shopping for new homes, the challenges facing builders, and the amount of foot traffic they’re currently seeing. For this reason, the National Association of Home Builders’ Housing Market Index surveys builders each month and scores their responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In December, the index hit 70, its highest reading since July 2005. Robert Dietz, NAHB’s chief economist, says this month’s increase may have more to do with the recent election than any fundamental change in conditions. Still, Dietz says the market looks good. “Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” Dietz said. “The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.” More here.

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