Where Are Real Estate’s Healthiest Housing Markets?

All housing market’s ebb and flow at their own pace. Which means what’s happening in one market may be entirely different than what’s happening in another. In other words, it’s about location. That’s why ATTOM Data Solutions keeps track of which housing markets are vulnerable to a downturn and which are least at risk. According to ATTOM’s most recent Special Housing Risk Report, the map hasn’t changed much lately. The same areas – mostly around Chicago, New York, and inland California – were determined to be most exposed to vulnerability, based on affordability, underwater mortgages, foreclosures, and unemployment numbers. The strongest markets were once again in the South and Midwest, with Virginia, Wisconsin, and Tennessee accounting for 22 of the 50 healthiest markets in the country. Rob Barber, ATTOM’s CEO, says the report doesn’t mean a downturn is coming. “Once again, this is not to suggest that any one market is facing imminent decline,” Barber said. “It’s more a measure of vulnerability gaps.” (source)

Home Loan Demand Spikes 15.6 Percent

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week across most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances and 15-year fixed rate loans. Rates for loans backed by the Federal Housing Administration saw no change from the week before. Michael Fratantoni, MBA’s senior vice president and chief economist, says rates dropped early in the week before climbing higher again. “Mortgage rates were trending lower over the course of last week until a stronger than anticipated employment report resulted in a bounce back …,” Fratantoni said. “Lower rates earlier in the week meant a strong increase in refinance activity, particularly for VA borrowers, who jumped on the chance to lower their rates.” Overall, demand for mortgage loan applications was up 15.6 percent from one week earlier, with refinance activity up 28 percent and purchase loan demand up 9 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Survey Finds Support For Building More Homes

A new survey from the National Association of Home Builders found that a majority of respondents know what the housing market’s main issue is and what they’d like done about it. Seventy-seven percent of survey participants said there’s an affordability crisis where they live and 80 percent say they think their local government isn’t doing enough to encourage more building. In other words, Americans know there are too few housing options available and building more affordable homes is the best way to address the affordability crunch. Carl Harris, NAHB’s chairman, says people want better housing policy. “With a nationwide shortage of 1.5 million housing units, the American people are demanding that their elected officials put in place policies that will enable builders to increase the production of sorely needed housing,” Harris said. Among the policies respondents support, providing incentives to builders, easing zoning regulations, and creating more medium-density housing all ranked high. (source)

Credit Availability Increases For 5th Straight Month

The typical home buyer doesn’t pay much attention to fluctuating lending standards or the number of available loan programs. They aren’t the first thing on buyers’ minds when shopping for a home. But they matter. Why? Because they affect how easy it is to find and secure financing. That’s why the Mortgage Bankers Association tracks mortgage credit availability each month. Its Mortgage Credit Availability Index gauges whether credit has become more or less available on a scale where any increase means credit is loosening and decreases mean credit is becoming more tight. According to their most recent index, the MBA says credit availability increased in May. It was the fifth consecutive monthly improvement. “Mortgage credit availability rose gradually in May and has increased for five consecutive months,” Joel Kan, MBA’s vice president and deputy chief economist, said. “The overall supply of mortgage credit is still close to 2012 lows, but is slowly increasing.” (source)

Americans Say It’s Still Time To Sell

The housing market was good for home sellers before the pandemic and became even better after it. The number of homes available for sale was low almost everywhere, and that meant multiple offers and competing home buyers. Homes sold quickly and for more than their asking price. But what about now? Well, according to the latest results of Fannie Mae’s Home Purchase Sentiment Index – which surveys Americans and asks for their opinions on buying/selling a home, mortgage rates, home prices, their job, and financial situation – the time is still right to sell. In fact, 64 percent of respondents said now is a good time for homeowners to list their homes. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says homeowners may be ready to make a move. “Homeowners’ perception of home-selling conditions declined only slightly and remains largely positive after a steady increase over the last few months,” Duncan said. “This suggests to us that, despite the so-called ‘lock-in effect,’ some homeowners may increasingly want or need to sell their homes for a myriad of non-financial reasons, which may lead to an increase in listings in the near future.” (source)

Expert Panel Sees Home Prices Moderating

The combination of rising mortgage rates and continued price increases have made buying a home more challenging over the past year or more. But according to a recent Fannie Mae poll of 100 experts from the housing and mortgage industry, relief may be on the way. In fact, the expert panel sees home prices beginning to moderate through the end of this year and into 2025. Their forecast calls for national home price growth of 4.3 percent in 2024, followed by a 3.2 percent increase the year after. The gradual calming of home price increases is due mostly to a rising number of homes for sale. “Listings have trended generally upward of late, suggesting to us that a rising number of current homeowners can no longer put off moving,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said. “However, we believe the ongoing affordability challenges are likely to weigh on how quickly these new listings convert to actual sales.” Panelists also expect mortgage rates to fall this year, though only modestly. (source)

Average Rates Mostly Steady Week-Over-Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week from the week before. Rates saw slight increases for 30-year fixed-rate loans with conforming loan balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Rates for loans with jumbo balances and 5/1 ARMs both saw declines week-over-week. Mike Fratantoni, MBA’s senior vice president and chief economist, says loan application demand also fell. “Mortgage rates moved slightly higher last week, with the 30-year conforming rate reaching … its highest level since early May – despite incoming data indicating somewhat slower economic growth,” Fratantoni said. “After adjusting for the Memorial Day holiday, both purchase and refinance application volumes were down, with purchase activity specifically 13 percent below last year’s level.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

How Much Has Price Per Square Foot Risen?

Square footage isn’t always the best way to measure a home’s value. The price for two homes with the exact same square footage can be very different based on their features, upkeep, etc. But while it may not be the best way to measure a home’s worth, it is a commonly cited data point and its ups-and-downs can tell us something about the market. In the case of a recent analysis from the National Association of Realtors’ consumer website, what it tells us is buying a home has gotten significantly more expensive over the past few years. In fact, based on price per square foot, the typical home on the market today is worth 52.7 percent more than it was in 2019. Danielle Hale, the website’s chief economist, says that presents an opportunity for home sellers. “The specifics will vary from market to market, but the data suggest ongoing opportunity for many sellers,” Hale said. “Though with mortgage rates still much higher than many existing homeowners enjoy, this opportunity favors sellers who don’t have to replace a mortgage, such as investors or second homeowners looking for an exit, or equity-rich homeowners looking to downsize in their current area or to a lower-cost region, as well as those planning to rent their next home.” (source)

Typical Mortgage Payment Increases $55 In April

Before you can seriously consider buying a home, you have to calculate whether or not you can afford the monthly mortgage payment. After all, there’s no point in falling in love with a house you can’t afford. But what’s a typical monthly mortgage payment look like these days? Well, the Mortgage Bankers Association tracks mortgage payments each month based on the loan amounts applied for by hopeful home buyers. In April, for example, the data shows the national median payment was $2,256. That’s up $55 from March when it was $2,201. Edward Seiler, MBA’s associate vice president, Housing Economics, and executive director of the Research Institute for Housing America, says affordability was challenging in April. “Home buyer affordability conditions declined further … in April, sidelining many prospective buyers from entering the housing market.” Seiler said. “In addition to lower mortgage rates, more housing inventory is desperately needed in markets throughout the country this summer to alleviate these tough affordability conditions.” Fortunately for buyers, for-sale inventory has been on the rise so far this year and mortgage rates, after spiking in April, have mostly retreated in recent weeks. (source)

Number of Homes For Sale At Four-Year High

How many homes there are available for sale affects both home buyers and sellers. For buyers, climbing inventory is good news and means price increases and competition should begin to slow. For sellers, more homes for sale could mean having to put in some extra effort to attract buyers and make your home stand out from the pack. These days, inventory is on the rise and – after falling to historic lows in recent years – that’s encouraging. It helps balance the market and evens out the highs and lows for both buyers and sellers. That’s why new numbers from the National Association of Realtors’ consumer website are a positive sign. The data shows the inventory of homes for sale has now increased year-over-year for 29 consecutive weeks and is 36.5 percent higher than last year. In fact, there are now more homes available on the market than there have been at any point since July 2020, nearly four years ago. (source)

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