The housing market is in a holding pattern, according to the latest forecast from Fannie Mae’s Economic and Strategic Research Group. Market conditions are improving – but slowly. As a result, home buyers remain hesitant even though price increases have calmed and there are more homes for sale. Mark Palim, Fannie Mae’s senior vice president and chief economist, says market conditions aren’t likely to change much this year but there is a silver lining. “Due to lock-in effect and affordability constraints, we currently expect another year of sluggish existing home sales,†Palim said. “A silver lining for affordability is that we also anticipate income growth will outpace both home price and rent growth this year – and in many markets, new homes are now priced competitively with existing homes and are far more available.†The group expects home price increases will continue to slow this year and mortgage rates will fall, though the decline will be less than previously expected. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates saw a slight decline last week from the week before. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances and loans backed by the Federal Housing Administration, while rates for 15-year fixed-rate loans were flat, and 5/1 ARMs saw a week-over-week increase. Mike Fratantoni, MBA’s senior vice president and chief economist, says demand for mortgage applications improved. “Mortgage application volume was little changed last week, but there was a small increase in conventional purchase volume, which brought the level of total purchase volume up almost 2 percent above last year at this time,†Fratantoni said. Week over week, refinance activity slowed 3 percent and total mortgage loan application volume was up 0.1 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Deciding how many bedrooms you’d like in your next home isn’t always just about your family’s sleeping arrangement. Bedrooms, after all, can be converted into many uses. Home offices, for example. Perhaps that’s why Americans now have more extra bedrooms than they’ve ever had before. A new report from the National Association of Realtors’ consumer website found the number of extra bedrooms in the U.S. hit 31.9 million in 2023. That’s more than four times the number of extra bedrooms reported in 1980. Back then, there were just seven million extra bedrooms. Danielle Hale, the website’s chief economist, says the number of bedrooms has been rising while persons per household has fallen. “Since the 1980s, we have seen the average number of bedrooms per home increase, and maybe more importantly, the number of persons per household has declined, creating an environment where we see both the largest number of extra bedrooms and the largest share of extra bedrooms, even with Americans using spare rooms as offices.†(source)

According to Fannie Mae’s most recent Home Price Index, home prices accelerated in the fourth quarter of 2024 after slowing the previous two quarters. The year-over-year acceleration was slight but highlights the delicate balancing act the housing market faces in 2025. Mark Palim, Fannie Mae’s senior vice president and chief economist, says the market is caught between competing factors. “The housing market in 2025 faces a difficult balance act, with a notable decline in mortgage rates likely needed to help unwind the lock-in effect and thaw the supply of existing homes for sale,†Palim said. “However, we believe such a decline would likely jumpstart demand from potential first-time home buyers currently waiting to purchase, which could lead demand to outpace any improvement in supply, further exacerbating already-high home prices and purchase affordability.†Put another way, when mortgage rates fall and affordability improves, buyers will return and – if enough of them do – it will end up putting upward pressure on prices, reducing the impact of any initial improvement. (source)

The National Association of Home Builders surveys builders each month to gauge their confidence in the market for newly built, single-family homes. Survey responses are scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In January, the NAHB’s Housing Market Index rose one point from the previous month to 47. Robert Dietz, NAHB’s chief economist, says the market is facing offsetting factors. “NAHB is forecasting a slight gain for single-family housing starts in 2025, as the market faces offsetting upside and downside risks from an improving regulatory outlook and ongoing elevated interest rates,†Dietz said. “And while ongoing, but slower easing from the Federal Reserve should help financing for private builders currently squeezed out of some local markets, builders report cancellations are climbing as a direct result of mortgage rates rising …†Despite rising rates, though, the index component measuring builders’ expectations for the next six months scored a 60 in January, indicating more home builders are optimistic about the market’s future than not. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications skyrocketed last week. The MBA’s Market Composite Index – which measures both refinance and purchase demand – was up 33.3 percent from one week earlier. Joel Kan, MBA’s vice president and chief economist, says the spike may be due to seasonal volatility. “This time of the year is a particularly volatile time for application volumes, so it can be more helpful to focus on the level rather than the percentage change,†Kan said. “Purchase applications were 2 percent lower, and refinances were 22 percent higher compared to a year ago.†Also in the report, average mortgage rates continue to climb, as economic concerns over inflation and budget deficits persists. Last week, rates were up for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 5/1 ARMs. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The average age of first-time home buyers is rising. Last year, it was 38 years old – up three years from 35 years old in 2023. The reason is simple. Buying a home has become more expensive and younger buyers face financial challenges older, repeat buyers don’t. Having to save a down payment from scratch, for example. That’s caused the average American to wait a little longer before becoming a homeowner. It’s also caused millennial buyers to consider overlooking a home’s issues in order to buy sooner. What are some of the things millennial home buyers say they’re willing to overlook in a home for sale? Well, according to a new survey, quite a lot. Topping the list of issues millennials are willing to overlook was a house that smells like cigarette smoke. Fifty-seven percent said they’d buy a smokey home. Asbestos was next on the list with 41 percent of respondents saying they’d buy a house that contained the toxic material. Other notable items younger buyers are willing to overlook included pests, a leaky roof, foundation issues, termites, crime, and mold. (source)

When you buy a home, you become a property manager. Which means you’re responsible for the home’s maintenance and upkeep. Everything from cutting the lawn and pulling weeds to maintaining the HVAC system is now your responsibility. It can take some work. It also takes some money. In fact, according to one new survey, 46 percent of homeowners said they spent more than $5,000 last year on unexpected repairs. That’s a 10 percent jump from the year before and pretty good evidence that new homeowners should prepare an emergency fund to handle any trouble that may come along. And it will. Among surveyed homeowners, 83 percent said they encountered an unexpected repair last year and almost half said it strained their household budget. Among the most commonly reported issues, roof repairs, door and window problems, and water damage from flooding led the list. (source)

A first-time home buyer’s priorities aren’t much different than any other buyer. After all, what home buyer isn’t looking for a good house in an affordable area that will see a great return on investment? That could describe just about everyone looking for a home to buy. But while we’re all mostly searching for the same things, first-time buyers do face some unique challenges, especially when home prices and mortgage rates are high. That’s why the National Association of Realtors’ consumer website compiled a list of the best markets for young buyers. Not all markets are the same and some offer better deals on houses in locations that are both near needed amenities and job opportunities but also are a fit for growing families. Where are they? Well, according to the analysis, six of the top 10 best markets for first-time buyers are in the South, with half of those in the state of Florida. The Mid-Atlantic also fares well, with Harrisburg, Penn landing the top spot and Rochester and Tonawanda, NY making the top 10. (source)

On TV, renovations are quick, easy, and always end in a job done perfectly. You don’t see the dust or endure weeks without access to your kitchen or bathrooms. You certainly don’t ever see a contractor who cuts corners, doesn’t finish the work, or does a poor job. In other words, renovations can be challenging. Maybe that’s why a recent survey of prospective home buyers found that 56.1 percent of them say the most important factor when searching for a home to buy is finding one that is move-in ready and needs no repairs. An additional nearly 40 percent listed a move-in ready home as somewhat important to them. But while a substantial number of potential buyers say they’re looking to avoid renovations and repairs, 54.8 percent said they’d compromise and buy a fixer-upper if that’s what was available. Are you willing to consider a home that needs work? (source)