property management Archives

Mortgage Rates Hit Lowest Level Since 2016

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 loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The decline brought rates to their lowest level since October 2016. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said rates fell further due to concern about the coronavirus. “The 10-year Treasury yield fell around 20 basis points over the course of last week, driven mainly by growing concerns over a likely slowdown in Chinese economic growth from the spread of the coronavirus,” Kan said. “This drove mortgage rates lower, with the 30-year fixed-rate decreasing for the fifth time in six weeks … Refinance activity jumped as a result, with an increase in the number of applications and a spike in the average loan amount.” Purchase activity, on the other hand, fell week-over-week, though it remains 11 percent higher than last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

The Top Factors That Cause Home Buyer Stress

Buying a home can be equal parts exciting and stressful. The thrill of starting fresh in a new house in a new neighborhood is undeniable. But the buying process, financing, and moving can cause anxiety, especially for buyers that haven’t been through it before. So what are the factors that cause prospective home buyers the most stress? Well, according to one recent survey, today’s buyers have some pretty specific concerns. The first is financing. Buying a home is major financial transaction and the process of securing a loan can seem complex and daunting. After all, borrowing that much money isn’t something to be taken lightly. So it’s natural that buyers might have some concerns when committing to a long-term loan. The other major stress point for prospective buyers is selling their existing home. Getting a house ready to sell, showing it, and timing the sale to coincide with an upcoming move can be overwhelming. That’s no surprise. There are a lot of unknowns and not knowing how everything will play out naturally can cause some stress. That’s why it’s so important to hire experienced real-estate professionals to help you through the process. A knowledgable guide can alleviate stress and ensure a smooth and successful home buying experience. (source)

Prices Increase Slower For More Expensive Homes

It’s said that real estate is all about location. And that’s generally true. But it isn’t the only thing that influences which way prices are headed and how quickly. Price range also makes a difference. For example, a recent analysis of current home prices found that homes in affordable price ranges were seeing annual increases much larger than more expensive homes. In fact, the most affordable third of homes sold in June saw year-over-year increases of 8.7 percent, while the most expensive third of homes only saw prices grow 1.1 percent. That’s no small difference. It is, however, understandable. Supply and demand are more well balanced on the high end of the housing market. The market for affordable homes, on the other hand, currently has more buyers than available homes, which causes prices to rise. But there is reason for encouragement. Available inventory is improving and should begin to help moderate price increases. As this happens, the gap between the high and low end of the market will narrow. More here.

Online Tools Gain Popularity With House Hunters

The internet and smartphones have changed the way we do things. Everything from how we buy groceries to how we listen to music has been affected by technological advances. So it should come as no surprise that shopping for a house has also been transformed by easy access to information and resources. A look at research from the National Association of Realtors shows just how much. For example, in 2003, 42 percent of home buyers said they used the internet frequently during their home search. This year, 83 percent said so. Additionally, over just the past few years, there’s been a nearly 20 percent increase in the number of buyers that said they frequently used a mobile or tablet application while searching for a home. But though the internet has become an important part of the house hunt, most buyers still seek out the expertise and experience of a professional when it comes time to buy. In fact, 89 percent of respondents who said they used the internet during their home search purchased their home through an agent. More here.

Mortgage Demand Spikes As Buyers Return

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were down last week for loans with conforming balances and the drop helped drive mortgage demand upward. In fact, demand for loans to buy homes was up 9 percent from the week before and is now 2 percent higher than the same week one year ago. Mike Fratantoni, MBA’s chief economist, said the increase in home buying activity follows several weeks of volatility. But though encouraging, the improvement wasn’t evenly distributed. “The rise in purchase activity was led by conventional purchase applications, which surged almost 12 percent, while government purchases were essentially unchanged over the week,” Fratantoni said. “This also pushed the average loan size for purchase applications higher, which likely meant there were fewer first-time home buyers in the market last week.” The survey shows rates were down for 30-year fixed-rate mortgages with conforming loan balances but unchanged for both jumbo loans and 15-year fixed-rate loans. Rates for loans backed by the Federal Housing Administration were up over the previous week. The MBA’s survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Home Prices Are Beginning To Slow Down

Home prices have been increasing for a while. Driven by high buyer demand and a lower-than-normal number of homes for sale, values have been on the rise. But, according to the latest S&P CoreLogic Case-Shiller Home Price Indices, the rate of home price increases is now starting to slow. In fact, the results show the National Index gained 5.5 percent year-over-year, which is down from 5.7 percent. Additionally, 16 of 20 included cities saw smaller annual increases. David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says month-over-month results show even more evidence that price increases are slowing. “On a monthly basis, nine cities saw prices decline in September compared to August,” Blitzer said. “In Seattle, where prices were rising at double-digit annual rates a few months ago, prices dropped last month.” Overall, prices were up just 0.4 percent month-over-month after seasonal adjustments. Naturally, the report is good news for prospective home buyers, as it means prices are beginning to moderate which will help improve affordability conditions. More here.

How Student Loan Debt Impacts Home Buyers

Young Americans want to own a home. Research consistently shows large majorities who say they aspire to one day become homeowners. And yet, the number of first-time home buyers active in the market has been lower than what is historically normal for several years. So why aren’t more young Americans buying houses? Well there are a number of factors at play but, among them, student loan debt is a big one. According to one recent study, the average monthly student debt payment for current renters who say they’d like to buy a home in the next year is $388. Naturally, an extra $400 a month to devote to a mortgage payment could go a long way. In fact, with that money, a buyer could afford a house that cost almost $100,000 more. But though that may seem discouraging, the same report also found that prospective buyers with student loan debt can still afford 52.3 percent of homes currently listed for sale. And, in areas where there are more affordable homes available for sale, it’s even easier to find something in a price range that works. In St. Louis, for example, a buyer with student loan debt can still afford nearly 75 percent of currently listed homes. More here.

Rising Rates, Stock Volatility Slow Mortgage Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes fell last week. In fact, purchase application demand was down 2.3 percent from one week earlier. Joel Kan, an MBA economist, told CNBC there are a couple of factors that could be contributing to the decline. “Recent volatility in the financial markets and increasing rates continue to adversely impact mortgage application activity, even as the general economic outlook remains positive,” Kan said. In other words, potential home buyers are feeling cautious, despite being relatively confident about their financial situation and the overall economy. Part of that has to do with rising mortgage rates and the recent ups-and-downs of the stock market. Another factor could be the normal sales slowdown that usually follows the summer season. Whatever the case, purchase demand is now 3 percent lower than at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Financial Confidence Fuels Home Buying Interest

How much money you spend is dependent on how much money you have. This is a simple equation and one that explains the current housing market. That’s because, though home prices and mortgage rates have gone up recently, home buyer demand remains high. And the most likely explanation for this is that the economy is stronger and people feel more secure financially. In short, they have more money so they’re able to afford more. Take Fannie Mae’s most recent Home Purchase Sentiment Index. The survey asks Americans for their perception of the current housing market, prices, rates, the economy, etc. According to the most recent results, 30 percent of Americans who say it’s a good time to buy a house cited favorable economic conditions as the reason they felt like the time was right. This is a good indication that financial confidence is helping to fuel interest in buying a home. However, though the economy may be helping keep buyers interested, affordability conditions are having an effect. In fact, the overall index fell 2 points from the month before with five of the six components seeing declines. More here.

The Simple Reason Housing Isn’t Headed For A Crash

At a glance, it might seem like home prices can only increase so much before they crash again. After all, they’ve largely recovered and are now at or above where they were just before they fell the last time. So doesn’t that mean we’re entering another housing bubble? Well, no. And the reason we aren’t is fairly simple. According to Lawrence Yun, the National Association of Realtors’ chief economist, the difference is what is pushing home values higher. “The current market conditions are fundamentally different than what we were experiencing before the recession 10 years ago,” Yun says. “Most states are reporting stable or strong market conditions, housing starts are under producing instead of over producing and we are seeing historically low foreclosure levels, indicating that people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.” Generally speaking, home prices have been moving up because there are more buyers than available homes for sale. And while that produces its own set of challenges, it doesn’t indicate the market is headed for another crash. More here.