Buyer Traffic Up As Summer Showings Rise

The internet has made it easier for potential home buyers to get a feel for what homes are on the market and in their price range. But while looking at listings online is a helpful resource, nothing beats seeing a house in person. Scheduling a showing is typically the next step for buyers interested in a house for sale. It allows them to get a closer look at the home’s condition, its layout, and it’s potential. Showings are a great way for buyers to determine whether or not they want to make an offer on a house. They’re also a reliable gauge of how much buyer interest there currently is in the market. After all, the more scheduled showings, the more interested buyers. And according to one recent analysis, buyer interest – and showings – are up this summer. In fact, showing activity, as of July, was up in every region across the country. In the Midwest and Northeast, showings saw a more than 20 percent year-over-year gain, while the South saw an 8 percent increase and the West was up 5.5 percent. (source)

Housing Market Sentiment Unchanged In August

Americans’ view of the housing market has plateaued, according to the latest results of Fannie Mae’s Home Purchase Sentiment Index. The monthly index is based on a survey that asks participants for their feelings about buying and selling a home, their financial situation and job, and where they think prices and mortgage rates are headed. In August, the index was unchanged from one month earlier. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says market sentiment is divided between buyers and sellers. “From a historical perspective, the current housing market is unusual, as demonstrated in part by the HPSI and its recent plateauing,” Duncan said. “Given the significant home price appreciation and rapid rise in mortgage rates, it is very much a tale of two markets, at least from a consumer perspective.” In other words, the market is good for sellers while, at the same time, challenging for home buyers. Survey results reflect that reality. In fact, the number of respondents who say now is a good time to buy a home remains low but the share of respondents who say it’s a good time to sell increased in August, rising to 66 percent. (source)

2nd Quarter Mortgage Gains Show Market Strength

ATTOM Data Solutions’ recently released second-quarter 2023 U.S. Residential Property Mortgage Origination Report shows the total number of residential mortgages secured during the second quarter increased 21 percent from the first quarter. The quarter-over-quarter increase – which includes purchase, refinance, and home-equity lending – was the first in two years. The improvement was led by purchase loans, which made up about half of all mortgages issued, with refinance packages making up a third and home-equity loans just under 20 percent. Rob Barber, ATTOM’s CEO, says the data shows the housing market’s continued strength. “Lenders certainly aren’t anywhere near as busy as they were back in 2021,” Barber said. “And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country.” Increases in residential mortgages were seen in 95 percent of the country, marking the first gains following eight consecutive quarterly declines. (source)

Average Mortgage Rates Fall Week Over Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. The drop wasn’t enough to boost demand for mortgage applications, though. Joel Kan, MBA’s vice president and deputy chief economist, says purchase and refinance activity were both down last week. “Both purchase and refinance applications fell … as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” Kan said. “The 30-year fixed mortgage rate decreased … but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Number Of Newly Listed Homes For Sale Increases

Options are important for home buyers. If you’re looking for a house to buy, having many homes to choose from is ideal for a couple of reasons. First, it raises the odds you’ll find one that fits your needs and checks the boxes on your wishlist. Secondly, a better balanced market, where the number of buyers and available homes are closely matched, means stable prices and less competition. In other words, an increasing number of homes for sale is good for home buyers – especially in a market low on homes. That’s the case today. The inventory of homes actively for sale is currently down 30-to-60 percent from pre-pandemic levels. But fortunately for prospective home buyers, one new analysis found the number of newly listed homes for sale saw a summer bump, climbing 3.5 percent from July to August. That’s an encouraging step in the right direction. It also puts new listings just 7.5 percent lower year-over-year, after being down 20.8 percent in July. (source)

Home Prices Increased 5% During First Half Of 2023

Nationally, home prices rose nearly 5 percent during the first half of 2023, according to new numbers from the S&P Case-Shiller Home Price Index. That’s a far smaller increase than has been seen over the past few years but is still faster than the historical median full-year increase. In other words, home prices are still rising, not as fast as they were in 2021, but faster than typical. Craig J. Lazzara, managing director at S&P, says the outlook is optimistic. “With 2023 half over, the National Composite has risen 4.7 percent, which is slightly above the median full calendar year increase in more than 35 years of data,” Lazzara said. “We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results.” S&P’s price index is considered among the leading measures of U.S. home prices and has been tracking home values for more than 35 years. (source)

Contracts To Buy Homes Increase In July

After a contract to buy a home is signed, that home’s sale is considered pending until it closes weeks later. Because signings precede closings by several weeks, they are considered a reliable indicator of future home sales. That’s why the National Association of Realtors tracks them each month. In July, the NAR’s Pending Home Sales Index found contract signings up 0.9 percent from the month before. It was the second consecutive month of gains. Lawrence Yun, NAR’s chief economist, says the improvement is a sign that buyer demand remains strong, despite current market challenges. “The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” Yun said. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.” (source)

Demand For Home Loans Sees First Increase In Weeks

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes was up for the first time in five weeks last week. In fact, the MBA’s purchase index improved 2 percent week -over-week. Increased demand from home buyers combined with a 3 percent gain in refinance activity to push overall mortgage application demand 2.3 percent higher than the week before. Joel Kan, MBA’s vice president and deputy chief economist, says application demand still remains lower than last year, despite the increases. “Mortgage applications for home purchases and refinances increased for the first time in five weeks but remained at low levels,” Kan said. “Purchase applications increased but were still 27 percent lower than a year ago, as elevated mortgage rates and tight housing inventory continue to weigh on home buying activity.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Median Mortgage Payment Mostly Unchanged

The current housing market presents some challenges for home buyers. High home prices, too few homes for sale, and volatile mortgage rates mean buyers have to be prepared. That means setting a budget and knowing exactly what you can afford in terms of a monthly mortgage payment. Fortunately for buyers wondering what their prospective payment might look like, the Mortgage Bankers Association tracks the median mortgage payment each month with its Purchase Applications Payment Index. The index can give buyers, not only a good idea of what the typical mortgage payment is now, but also whether or not it’s headed higher or starting to fall. According to its most recent release, the MBA says the national median payment applied for by purchase applicants was $2,162 in July – $1,451 for lower-payment mortgages. That’s virtually unchanged from the previous month, though up significantly from where it was last year at the same time. It means buyers are still facing affordability challenges but haven’t seen a summer spike when it comes to monthly mortgage costs. (source)

Hot ZIP Code Report Reveals What Buyers Want

A lot of what home buyers want is predictable. It doesn’t change much from year to year. Affordability, for example, is always a top priority for buyers. Everybody wants a good home that doesn’t break their budget. So it’s no surprise to find affordable markets topping a recent list of the country’s hottest ZIP codes. The list, released by the National Association of Realtors’ consumer website, found the country’s hottest markets concentrated in the Midwest and Northeast. In other words, markets where there are affordable homes for sale. They’re also in areas just outside major metropolitan areas. That, according to the website’s chief economist, Danielle Hale, is a more recent development. “As many companies continue to call employees back to the office, we’re seeing a surge in home shoppers who are seeking a desirable combination of cost and convenience within commuting distance of major metropolitan areas,” Hale said. Commuting distance was low priority for home buyers during the pandemic when many transitioned to remote work. Now, it appears, commutes are becoming a factor once again, as buyers hunt for homes with a combination of affordability and convenience. (source)

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