The housing market is becoming more balanced and it’s putting home buyers in better position. Buyers are benefiting from a rising number of homes for sale, which has caused home price increases – and the overall market – to slow. Perhaps that’s why sales of previously owned homes saw a 2 percent month-over-month increase in July. According to new numbers from the National Association of Realtors, sales were up in the Northeast, South, and West, while falling 1.1 percent in the Midwest. Lawrence Yun, NAR’s chief economist, says buyers are better situated than they’ve been in a long time. “The ever-so-slight improvement in housing affordability is inching up home sales,” Yun said. “Home buyers are in the best position in more than five years to find the right home and negotiate for a better price. Wage growth is now comfortably outpacing home price growth, and buyers have more choices.” It’s true. The number of homes for sale is currently at its highest level since May 2020, with a 4.6-month supply of available homes at the current sales pace. A 6-month supply is considered healthy for the market. (source)

Demand for loans to buy homes continues to outpace last year’s level, according to new numbers from the Mortgage Bankers Association. The MBA’s weekly applications survey found purchase application demand was 23 percent higher than year before levels last week, despite only increasing 0.1 percent from the week before. Joel Kan, MBA’s vice president and deputy chief economist, says demand from buyers has persisted, despite economic and affordability challenges. “Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace,” Kan said. “Prospective home buyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges.” Average mortgage rates were mixed last week, with rates up for 30-year fixed-rate loans, 5/1 ARMs, and 15-year fixed-rate loans, but down for jumbo loans and loans backed by the Federal Housing Administration. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

A few years back, it wasn’t unusual for an attractive home to be listed for sale on a Thursday and sold before the end of the weekend. The market was frenetic and home shoppers didn’t have much time to deliberate. Buyers had to move fast if they hoped to get an offer submitted before the seller had multiple competing offers already in hand. These days, the market has slowed down. In fact, according to one recent analysis, listings sold in July were on the market an average of 24 days. That’s six days longer than last year at the same time and significantly more time than during the height of the pandemic-era buyers’ boom, when homes for sale sold in days rather than weeks. Naturally, slower sales are good for home buyers, as they mean less pressure and more time to think over a big financial decision. For sellers, it means adjusting expectations and putting in more effort. If sellers want their homes to sell quickly, they’ll have to price them correctly and make them as attractive to buyers as possible. (source)

Each month, the National Association of Home Builders takes a survey of builders and scores their answers on a scale where any number above 50 means more builders view conditions as good than poor. Flat now for several months, the NAHB’s Housing Market showed little change in August, with builder confidence down one point from July to 32. Since May, the index has been holding between 32 and 34. Buddy Hughes, NAHB’s chairman, says buyers and builders are both waiting for change. “Affordability continues to be the top challenge for the housing market and buyers are waiting for mortgage rates to drop to move forward,” Hughes said. “Builders are also grappling with supply-side headwinds, including ongoing frustrations with regulatory policies connect to developing land and building homes.” Still, despite current frustrations, home builders remain relatively optimistic about the future, with the index component measuring expectations for the next six months scoring a 43. (source)

A new study from the National Association of Realtors’ consumer website shows why homeowners benefit from living in an area with good schools. The study looked at the 50 most popular school districts by metro area and found that, in more than half of them, median list prices averaged $1.21 million, which is 135 percent higher than in surrounding metros. That’s a big benefit. Danielle Hale, the website’s chief economist, says schools have always been a factor for buyers. “School quality has long been a driver of home buying decisions,” Hale said. “Our data shows families are making trade-offs – sometimes paying a significant premium for top-rated districts, and other times prioritizing value in areas that still offer strong academics. This year, we also saw a sizable interest in districts outside major urban centers, reflecting both affordability concerns and a desire for lifestyle amenities.” (source)

A prospective borrower’s chances of being approved for a loan aren’t fixed. There are times when lending standards are looser and getting a loan is easier. There are also times when there are fewer available loan programs and tighter conditions mean borrowers will need to be more financially secure if they hope to get approved. In other words, mortgage credit availability matters. That’s why the Mortgage Bankers Association tracks it each month with its Mortgage Credit Availability Index. In July, the index rose slightly, indicating conditions have improved for borrowers. Joel Kan, MBA’s vice president and deputy chief economist, says ARM loans were behind the gains. “Credit availability edged slightly higher in July, driven by increased availability of ARM loans,” Kan said. “This development was consistent with a steeper yield curve and the jumbo-conforming spread back in negative territory. The average jumbo rate was around 8 basis points lower than the average conforming rate in July.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. Rates were down across most loan categories, including 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. Joel Kan, MBA’s vice president and deputy chief economist, says the decline pushed refinance activity to a four-month high. “The 30-year fixed mortgage rate declined … last week, which spurred the strongest week for refinance activity since April,” Kan said. “Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications.” But despite favorable rates, home buyers failed to respond. In fact, purchase demand rose only 1 percent from the previous week, though it remains 17 percent higher than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Just because the vast majority of us say we’d like to be homeowners doesn’t mean we necessarily understand what it takes to get there. The buying process can be stressful – and the challenges don’t end once you’ve closed and have keys to your new place. Just ask recent first-time buyers. According to a new survey, first-time home buyers say they found the process stressful, even more so than finding a job or planning a wedding. They also reported challenges. Among them, almost half said understanding the full scope of what buying a home entails was difficult, as was finding a home that matched their wish list. Recent buyers said they had to compromise, including commuting farther to work, buying in a location that wasn’t their first choice, and purchasing a home with fewer amenities (e.g. no backyard, no garage, no pool). They also said unexpected repairs and hidden costs were an eye opener. But despite the challenges and surprises, first-time buyers are glad they did it. In fact, 80 percent said the experience gave them a greater sense of control and boosted their financial confidence. (source)

Saving enough money to buy a house has always been a challenge. These days, coming up with a substantial down payment can seem almost impossible – especially for first-time buyers who don’t have the benefit of home-sale proceeds to help fund their purchase. Fortunately, though, buyers don’t have to come up with a full 20-percent down payment in order to qualify for a mortgage and purchase a house. Home buyers with lower down payments can still buy with the help of private mortgage insurance. What is PMI? Well, it’s insurance that allows a borrower who can’t put 20 percent down to qualify for a conventional loan by insuring the lender against losses. Typically, the cost of PMI is rolled into a borrowers’ monthly payment and can be removed once the borrower has reached a certain loan-to-value ratio. According to the most recent numbers, PMI helped 800,000 low down-payment buyers qualify for financing last year, with 65 percent of those being first-time home buyers. (source)

Each month, Fannie Mae’s National Housing Survey asks Americans how they feel about the housing market, economy, and their personal financial situation. The survey is a good gauge of home buying sentiment and tracks whether participants think it’s a good time to buy or sell a home, whether they think mortgage rates and prices will go up or down, whether they worry about losing their job, and whether they believe their personal finances will improve or not over the next year. According to the most recent results, consumer sentiment has improved overall, with the index up two points from the previous month. Among the results, 66 percent of respondents said they’d buy, rather than rent, a home if they were going to move. Also, though fewer Americans think home prices will fall over the next year, the net share who think mortgage rates will decline increased 5 percent. Overall, the share of participants who say it’s a good time to buy a home fell 5 percent while the share who say it’s a good time to sell was unchanged from the month before. (source)