That mortgage rates moved higher last year isn’t news to anyone that’s been thinking of buying a home. It seemed, just as home price increases started to slow, mortgage rates heated up. But, according to the Mortgage Bankers Association’s final Weekly Applications Survey of 2018, mortgage rates ended the year trending downward. The now weeks-long decline continued over the final two weeks of December and has now dropped rates to their lowest level since September of last year. But, though rates fell, demand for mortgage applications was also down. Joel Kan, MBA’s vice president of economic and industry forecasting, says demand for loans may have been affected by the government shutdown. “Even with lower borrowing costs, both purchase and refinance applications decreased over the two-week holiday period, as both conventional and government applications dropped,†Kan said. “Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity.†Whatever the case, the fact that mortgage rate increases have cooled off is encouraging news for prospective buyers. More here.

Living close to family and friends is a priority for most home buyers. It consistently ranks high on the list of things buyers say they want in their next place. For that reason, most of us tend to stay close to home. But that’s not to say there aren’t Americans looking to make a move that takes them a bit further away. In fact, there are many reasons someone might want to shop for a home outside of their immediate neighborhood, including a new job opportunity or retirement. But where are the most popular destination for out-of-state movers? Well, according to United Van Lines 42^nd Annual National Movers Study, Vermont is the state with the highest percentage of inbound moves. But though the Northeastern state leads the list, most of the states seeing a high percentage of out-of-state migration are in the South and West. States like Oregon, North Carolina, Nevada, Washington, South Dakota, and Arizona are attracting more Americans than location in the Midwest and Northeast. Michael Stoll, an economist and professor in the Department of Public Policy at the University of California, Los Angeles, says there are reasons these places are more popular. “The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factors like job growth, lower costs of living, state budgetary challenges, and more temperate climates,†Stoll said. More here.

Naturally, home prices are a top topic for anyone buying or selling a home in the coming year. And, with mortgage rates expected to continue trending upward, they are becoming an even more important component of the affordability equation. So what’s the forecast for 2019? Well, there’s good news and bad. For starters, CoreLogic’s most recent Home Price Index says prices are actually expected to have fallen from November to December. But, year-over-year numbers show they’ve risen by 5.1 percent from 2017. That means, values are moderating in the near term but still increasing overall. Further, they expect that they’ll continue to head upward. That’s the bad news. The good news is that a rising number of available homes for sale is expected to slow the rate of increase. In fact, CoreLogic expects home prices this year to come in 4.8 percent higher than the year before. And while the improvement may seem slight, the fact that price increases are beginning to slow is good news for interested home buyers this year. More here.

A new survey shows that homeownership among millennials between the ages of 28 and 31 jumped from 27 percent to 47 percent in just two years. Additionally, ownership among people aged 32 to 36 was up 11 percent. That home buying has surged among younger Americans is an encouraging sign for the housing market – especially since homeownership levels haven’t yet fully recovered from the housing crash. But, like anything, there’s another side to the story. That’s because, increasing demand from first-time home buyers could also put pressure on home prices if available inventory can’t keep up with the level of interest. According to one projection, millennials will purchase 10 million homes over the next decade. Whether new home construction and existing supply can meet the demand from those buyers will be a key driver of the real estate market in the years to come. If supply continues to lag behind, home prices will keep rising, which will build equity among current homeowners but cause affordability issues. On the other hand, if supply increases, prices should moderate and lead to booming home sales. Either way, first-time home buyers will have a significant effect on housing market conditions in the coming years. More here.

When shopping for something, having more to choose from is generally a good thing. And, when the thing you’re shopping for is a house, that’s especially true. That’s because, in addition to giving buyers options, more homes for sale typically helps keep prices in check. When there are enough homes to meet demand from interested buyers, prices moderate. But, over the past few years, available inventory has been lower than normal in most markets. In fact, last year at this time, inventory was down 9.1 percent on an annual basis. Because of this, home values have been increasing. That may be starting to change, however. According to new data, the number of homes for sale has now increased year-over-year for three consecutive months. And, though the most recent improvement was only 0.4 percent, it’s still a good sign for buyers. After all, if inventory continues to gain, even small increases could help lead to more favorable affordability conditions. More here.

Paying rent each month can make it difficult to save money for a down payment. But, according to new research, renters who hope to one day buy a home may be finding it a little bit easier. That’s because, though rent is up about 3 percent from last year, it isn’t increasing quite as rapidly as it was before. And there may be evidence that the slowdown is helping aspiring home buyers save money to buy a house – especially millennials, who make up half of all renters. For one, the number of renters is falling. In fact, there were 43.2 million renter households across the country in 2018, which is about 100,000 fewer than in 2017. Combine that with the fact that millennials are currently buying more homes than any other generation, and it appears slower rent appreciation may be helping more renters make the leap to homeownership. Of course, the rate of rent increases isn’t the same across all markets. For example, while the New York metro area has seen rent rise just 1 percent over the past year, in Las Vegas rent is up 6.5 percent year-over-year. Still, if the overall trend holds, conditions may be getting easier for renters who hope to buy a home in the near future. More here.

The real estate market is typically slower in the fall and winter. So, it’s not that surprising to see homes for sale are staying on the market longer than they were a few months ago. But according to the National Association of Realtors’ most recent existing home sales report, not only was the typical listing on the market for 42 days in November, home price increases are beginning to moderate as well. In other words, the market’s slowed down and it’s good news for potential home buyers. The report shows buyers have already begun to take notice. Sales of previously owned homes were up nearly 2 percent in November and it was the second consecutive month of gains. “The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago,” Lawrence Yun, NAR’s chief economist, said. “Rising inventory is clearly taming home price appreciation.” In short, the balance between available homes and the number of interested buyers is beginning to even out, which is leading to more favorable conditions. If the trend continues, better prices and more choices will make the winter housing market a good deal for house shoppers. 

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 mortgages. The decline brought rates to their lowest level since September and continued a trend downward that began last month. But though rates dropped, demand for mortgage applications did as well. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says economic uncertainty outweighed the effects of favorable mortgage rates. “Despite mortgage rates falling across the board last week to their lowest levels in three months, mortgage applications also declined, as more potential borrowers likely stayed away because of ongoing financial market volatility and economic uncertainty,” Kan said. Demand for loans to buy homes remained above last year’s levels, however. In fact, purchase loan activity was up 2 percent from where it was 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.

The end of the year is typically the time when experts and prognosticators make predictions for the year ahead. And while it’s not easy to see into the future, year-end forecasts can give us an idea of which scenarios are likely to play out. Take Fannie Mae’s most recent forecast from their Economic and Strategic Research Group. Its experts say economic growth will begin to slow in 2019 but the real estate market may actually be well positioned. And that could be good news for home buyers. Doug Duncan, Fannie Mae’s chief economist, says mortgage rates and home sales will stabilize next year. “We maintain our call that the Fed will hike rates once more in December and two more times in 2019, despite rising market expectations of fewer hikes amid stock market volatility,†Duncan said. “If mortgage rates trend sideways next year, as we anticipate, and home price appreciation continues to moderate, improving affordability should breath some life into the housing market.†In other words, though conditions may still be challenging, home buyers should see a calmer market next year and the beginning of some relief. More here.