According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes is now 27 percent higher than at the same time last year. The improvement – which comes following a 1 percent week-over-week increase – marks three consecutive months of gains over last year’s numbers. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the housing market’s quick rebound has been a bright spot in the economy. “The housing market remains a bright spot in the current economic recovery and these results, combined with July data on housing starts and home builder optimism, suggest that housing supply could be increasing to better meet the strong demand for buying a home,†Kan said. Also in the report, average mortgage rates were up from the previous week, with increases for 30-year fixed-rate loans with conforming and jumbo balances and 15-year fixed-rate loans. Rates for loans backed by the Federal Housing Administration were down from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

In the spring, when the coronavirus had just begun to spread, there were some indication that prospective home buyers were already adjusting their plans. Buyer surveys and online search data showed there were a significant number of home shoppers who – driven primarily by the availability of remote work – decided to expand their search and look at homes in suburban and rural areas, further from the city. For example, one analysis found that the percentage of prospective buyers who said they planned to search for a home in a rural area increased from 9 percent to 19 percent following the onset of the pandemic. But what, if anything, has the interest in smaller, less populated locations done to home prices in those areas? Well, recent data shows it may have caused prices to rise more quickly. In fact, homes in rural areas saw their median sales price increase 11.3 percent year-over-year through the week ending August 2. For comparison, suburban homes were up 9.2 percent and urban areas saw a 6.7 percent annual increase. (source)

The National Association of Home Builders’ Housing Market Index measures builder confidence in the market for newly built single-family homes. The survey, which has been conducted for the past 35 years, scores builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In August, the index reached a score of 78, which matches its all-time high set in 1998. Robert Dietz, NAHB’s chief economist, says the housing market’s rebound has been a bright spot during the pandemic. “Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,†Dietz said. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs, and rural markets as renters and buyers seek out more affordable, lower density markets.†Among its components, the gauge of current buyer traffic showed the biggest month-over-month improvement, rising eight points to 65 – its highest level ever. (source)

If you’re considering buying a home, you’ve likely already thought about whether or not you can afford it. After all, buying a home is a major financial transaction, so there are few considerations more important than affordability. That’s why the National Association of Home Builders latest Housing Opportunity Index is good news for potential buyers. The report – which measures how affordable homes are for families earning the national median income – found that 59.6 percent of new and existing home sold between April and June were affordable. But while that’s positive news, affordability did fall from the first quarter, with the number of affordable homes down due to rising home prices. “Home prices appreciated robustly during the second quarter due to better-than-expected housing demand in the wake of the pandemic and because the coronavirus hindered the ability of builders to ramp up production,†Robert Dietz, NAHB’s chief economist, said. In fact, increasing prices let to a 1.7 percent drop in the number of affordable homes. During the first quarter, 61.3 percent of sold homes were considered affordable.

When the coronavirus pandemic began in mid-March, there were understandable concerns about how it would affect the housing market. But fortunately, though activity did fall, it rebounded just as quickly. Home buyers who delayed their plans adapted to new safety regulations and resumed their home search. But while buyers were quick to get back into the market, home sellers didn’t rebound quite as fast. The number of newly listed homes for sale lagged and it resulted in more competition among buyers, upward pressure on prices, and an increase in bidding wars. But according to the most recent Weekly Recovery Report from the National Association of Realtors’ consumer website, things may finally be turning around. In fact, the report, which covers numbers through the week ending August 8, found new listings grew passed their pre-pandemic baseline for the first time since the coronavirus’ onset. Javier Vivas, director of economic research for the site, says seller confidence has reached an important milestone. “Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone,†Vivas said. “After five long months, sellers are back in the housing market.†(source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week, dropping to new survey lows. Rates were down across all loan categories, including 30-year fixed-rate loans with conforming loan balances, jumbo loans, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said favorable rates helped push demand for mortgage applications higher. “Refi activity responded to these lower rates, with the refi share reaching almost 66 percent of all applications, its highest level since May,†Kan said. “Home purchase activity continued its strong run with a 2 percent increase over the week and was up around 22 percent compared to the same week a year ago.†However, though low rates and rising demand are positive signs for the market, challenges remain. Among them, low housing inventory, the coronavirus’ spread, and the job market are lingering concerns that will continue in the week ahead. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Housing conditions are largely dictated by supply and demand. Take a look at the balance of interested buyers to available homes and you can get a good idea where the market is headed. But while that seems simple enough, the underlying factors that cause shifts in supply and demand are less clear cut. That’s because there are an almost infinite number of things that might play a role. Everything from the global economy to the time of year can affect the balance of buyers and homes for sale. For example, the typical home buyer likely doesn’t think a lot about how the cost of lumber affects how much they’ll pay for a home. It does, though. In fact, according to the National Association of Home Builders, lumber prices have been high for a while now and, since mid-April, have moved even higher. The reasons have to do with a lack of domestic production and tariffs on Canadian lumber. However, the affect is that home builders have to add that cost to the price of new homes. That can slow the number of homes being built and drive the price up on the ones that are. Ultimately, that means high lumber costs hinder home building, which contributes to a lack of affordable inventory and higher home prices across the board. (source)

Fannie Mae’s Home Purchase Sentiment Index surveys Americans about their feelings toward the housing market, buying and selling a home, job expectations, and their personal financial situation. The monthly survey aims to get a general sense of how optimistic Americans are about their money and the real estate market. In July, the index fell 2.3 points, following two consecutive months of gains. The decline was mostly due to a drop in the number of respondents who said it was a good time to buy a home. However, there was an uptick in participants who said it was a good time to sell. In fact, the net share of those who say it’s a good time to sell was up 4 percent. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says that’s mostly due to home price expectations. “Supply constraints appear to be applying upward pressure to consumers’ home price expectations, which in turn has contributed to both a sharp reversal in optimism about whether it is a good time to buy a home and further improvement in home-selling sentiment,†Duncan said. Also in the report, the number of respondents who said they weren’t concerned about losing their job in the next year was up 5 percent – potentially a good sign for future housing sentiment. (source)

Simply put, having equity means your home is worth more than the amount you owe on it. And, according to ATTOM Data Solutions’ second-quarter 2020 U.S. Home Equity & Underwater Report, there are an increasing number of American homeowners who have it. The report looked at the number of mortgaged properties that could be considered equity rich, which was defined as homes whose estimated market value is at least 50 percent more than the amount owed on them. During the second quarter, 27.5 percent of the 55.2 million mortgaged homes in the country qualified as equity rich. That’s up from 26.5 percent during the first quarter. Todd Teta, chief product officer with ATTOM, says the improvement is another sign of the market’s strength despite a challenging environment. “Homeowners saw their equity rise far and wide throughout the United States during the second quarter of this year in yet another sign of the housing market punching back against the coronavirus pandemic,†Teta said. “More property owners rose into equity-rich territory and escaped the seriously underwater lane, putting more money into the average household.†(source)

Everybody’s home search is different. Where one buyer may fall in love, make an offer, and sign a contract after seeing a single house, another may spend weeks without finding a home that fits their needs and lifestyle. In short, how long it takes to locate and close on a house depends on a long list of factors, personal preferences, and conditions. So what do buyers who’ve been searching say is the number one thing making it difficult to find a home? Well, according to a new report from the National Association of Home Builders, it’s finding a home in their price range. In fact, 39 percent of respondents who have been actively searching for a home said that finding one at a price they could afford was the biggest obstacle. Another common factor was finding a house that had all of the buyer’s desired features. Among participants, 36 percent said they were having trouble finding a home that checked off the items on their wish list. Being outbid by another buyer and finding a home in the right neighborhood were also popular answers, with both being named by around 30 percent of survey participants. (source)