The National Association of Home Builders’ Housing Market Index is a monthly survey measuring builder confidence in the market for newly built homes. The survey asks builders for their perception of current sales conditions, expectations for the next six months, and home buyer traffic. Responses are scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In June, the index fell two points to 43. Carl Harris, NAHB’s chairman, says interest rates are keeping conditions challenging. “Persistently high mortgage rates are keeping many prospective buyers on the sidelines,†Harris said. “Home builders are also dealing with higher rates for construction and development loans, chronic labor shortages, and a dearth of buildable lots.†But challenging conditions for builders may have benefits for buyers, as the survey also found an increasing number of builders cutting prices and offering incentives to entice home shoppers. In fact, twenty-nine percent of builders reported cutting prices, up from 25 percent the month before. The average reduction was 6 percent. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates declined 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 improvement helped push demand for mortgage applications higher, rising 0.9 percent from the week before. Mike Fratantoni, MBA’s senior vice president and chief economist, says rates are now lower than they’ve been since the end of March. “Mortgage rates dropped last week following the latest inflation data and the FOMC meeting, with the 30-year conforming rate dropping to … its lowest level since the end of March,” Fratantoni said. “Purchase applications increased a small amount for the week, led by applications for conventional loans.” Despite increasing demand, purchase volume remains 10 percent lower than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Demand for mortgage applications can be a good indicator of future home sales numbers. After all, most buyers require a mortgage to finance their home purchase. So it makes sense that increasing demand for loan applications would coincide with an eventual increase in closed sales. That’s why a new report from the Mortgage Bankers Association is an indication that new home sales are about to heat up. The report found application demand for new home purchases rose nearly 14 percent in May from year-before levels. Joel Kan, MBA’s vice president and deputy chief economist, says fewer existing homes has driven buyers to consider buying new. “With existing-home inventory still lagging in many markets, many home buyers have turned their interest toward newly built homes, particularly FHA borrowers,†Kan said. Application demand for new home purchases also improved on a month-over-month bases in May, rising 1 percent from April. (source)

When inventory’s tight and the market’s competitive, you don’t see many price cuts on listed homes. Only in cases where a home has issues or was priced too high will you see its price slashed in hopes of attracting buyers. That’s a seller’s market – one where good homes receive multiple offers and commonly sell for above their asking price. These days, most markets still favor home sellers, even as the inventory of homes for sale has improved from recent lows. But while sellers still hold most of the negotiating power, according to one new analysis, more listed homes are seeing price cuts. In fact, the number of homes with a price cut in May was the highest it’s been in six years, with nearly a quarter of all homes for sale undergoing a price cut during the month. That’s a sign that the market is becoming better balanced, as the number of homes for sale grows and provides buyers with better options, less competition, and smaller price increases. (source)

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)

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)

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)

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)

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)

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)