Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans which asks for their opinion on buying/selling a home, mortgage rates, prices, their job and financial security. The index hopes to capture Americans’ general feeling about the housing market. In March, it found respondents slightly more optimistic than the month before. In fact, the share who say it’s a good time to buy was up 4 percent and the share who say it’s a good time to sell rose 2 percent. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says it’s a sign consumers have adjusted their expectations. “The HPSI remained relatively flat in March, but we’re seeing signs that consumers may be adjusting their expectations for the housing market to better accommodate the higher mortgage rate and home price environment,†Duncan said. But while Americans are feeling better about buying or selling a home, they also believe prices and mortgage rates will continue to increase over the next 12 months – an indication that affordability concerns persist. (source)

When you buy a home, you’re buying into a community. That means paying property tax to help better that community. Property taxes help cover the bill for things like schools, police and fire departments, road repairs, and libraries. Necessary stuff, for sure. But though they pay for things we need, taxes are never popular. And now, according to ATTOM Data Solutions, they’ve risen. In fact, according to ATTOM’s analysis of taxes on 89.4 million single-family homes across the country, the average tax increased 4.1 percent last year, after going up 3 percent the previous year. Rob Barber, ATTOM’s CEO, says the increase was likely connected to inflation. “The tax increases were likely connected, at least in part, to inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses,†Barber said. But while property tax is up nationally, it varies from location to location. For example, Illinois has an effective rate of 1.88 percent, the highest in the nation, while Hawaii’s effective property tax rate is just 0.31 percent. (source)

It’s been a while since the market favored home buyers. With inventory hovering near historic lows, home sellers have reaped the benefits of bidding wars, buyer competition, and spiking prices for most of the past several years. Now things may be changing. The number of homes for sale remains low but recent improvements have conditions looking better for buyers than they’ve been in years. In fact, according to a recent analysis from the National Association of Realtors’ consumer website, price cuts on homes for sale are higher than they’ve been since 2019, with reductions rising in 34 of the 50 largest metro areas. Danielle Hale, the website’s chief economist, says things should only get better. “Sellers are starting to warm up to the current environment, wading into the market in increasing numbers despite market mortgage rates that are likely above their existing rate, if they have a mortgage,†Hale said. “As seller optimism swells, we may see even further inventory gains later in the season that will likely create a more balanced environment for hopeful home buyers.†(source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. Rates were down from the week before for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But despite the declines, demand for mortgage applications was relatively flat. In fact, the MBA’s Market Composite Index – which measures both refinance and purchase loan activity – was down 0.6 percent week-over-week. Joel Kan, MBA’s vice president and deputy chief economist, says rates remain elevated. “Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity,†Kan said. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week.†The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

It’s easy to only focus on the upfront costs of buying a home – especially when first considering whether or not to buy. Coming up with a down payment and money to cover closing costs is the top priority. Then buyers have to think about how their prospective mortgage payment fits into their monthly budget. What they don’t often consider, though, are the other costs of homeownership. Maintenance and improvements, utilities, property tax, and insurance all add up and, if you haven’t planned for them, may take you by surprise. You wouldn’t be alone, though. In fact, one recent survey found 88 percent of homeowners say the cost of owning a home is more expensive than they expected. In other words, it’s easy to underestimate the true costs of homeownership, many buyers do. That makes it important for home shoppers to be as thorough as possible when considering the costs of owning a home. (source)

There are many different factors a home buyer has to consider before shopping for a house. Things like what type of home they’d like and where they’d like to live are obviously important. But before a buyer can focus in on the number of bedrooms they’ll need or which neighborhoods they’ll target, they have to figure out whether or not they can afford to buy. Buying a home, after all, is a financial transaction. That means affordability is the first thing to consider. The good news is it’s improving. According to ATTOM Data Solutions first-quarter 2024 U.S. Home Affordability Report, affordability has improved now for two consecutive quarters. “The picture for home buyers is brightening a little again as affordability measures have improved for the second quarter in a row,†Rob Barber, ATTOM’s CEO, says. “With mortgage rates coming down and home prices growing only by modest amounts, it’s gotten a bit easier for average wage earners to afford a home so far this year.†But while affordability has improved, it’s still challenging. ATTOM found median home ownership costs are higher than historical averages in 577 of the 590 counties included in its analysis. (source)

There is no age requirement to buy a home. If you can afford it, you can do it. But while you can buy a home at any age, factors such as cost of living, affordability, the inventory of available homes, and demographics influence at what age people actually do. That’s the basis of a new study from the National Association of Realtors. The study looked at the median age of home buyers in different parts of the country to determine which had the oldest and youngest home buyers. The youngest buyers were found in the Midwest, where the median age was 39 years over the past five years. The Northeast followed closely behind, with a median buyer of 40 years. The West and South had an older median buyer. The reasons for the regional differences vary. For example, the Midwest is the country’s most affordable region, which makes it easier for younger buyers to enter the market. The South, on the other hand, has an older median buyer due mostly to demographics. Older Americans tend to retire to warm weather climates, which drives the median higher in places like Florida, the state with the country’s oldest median buyer at 50 years. (source)

After a contract to buy a home is signed, the sale is considered pending until it closes several weeks later. That’s why pending home sales are considered a good indicator of future home sales. It’s also why the National Association of Realtors tracks them from month to month. Since the vast majority of signed contracts lead to final sales, measuring pending sales offers a peek at where home sales are heading. According to the NAR’s most recent Pending Home Sales Index, the market is heading upward. In fact, pending sales were up 1.6 percent in February from the month before. Lawrence Yun, NAR’s chief economist, says it’s a sign the market is improving. “While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,†Yun said. “Ongoing job gains are clearly increasing demand along with more inventory.†Results show the Midwest leading all regions, with a 10.6 percent jump in contract signings from the month before. The South also rose, with a 1.1 percent increase. The Northeast and West, on the other hand, saw declines. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved lower last week from the week before. Rates were down for 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. But while rates dipped, the improvement wasn’t enough to boost demand for mortgage applications, which were mostly flat from one week earlier. Joel Kan, MBA’s vice president and deputy chief economist, says the market is improving but gradually. “Purchase applications were essentially unchanged, as home buyers continue to hold out for lower mortgage rates and more listings to hit the market,” Kan said. “Lower rates should help to free up additional inventory as the lock-in effect is reduced, but we expect that will only take place gradually.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Each month, Fannie Mae’s Economic and Strategic Research Group releases an outlook covering what they see ahead for the housing market and overall economy. In March, the group says they expect the housing market will continue to thaw after a slow 2023. Home sales will trend higher and so will the number of available listings. The group sees affordability constraints continuing, though, with mortgage rates remaining elevated due to inflation and a strong job market. “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast, as markets continue to evolve their expectations of future monetary policy,†Doug Duncan, Fannie Mae’s senior vice president and chief economist, says. “Still, while we don’t expect a dramatic surge in the supply of homes for sale, we do anticipate an increase in the level of market transactions relative to 2023 – even if mortgage rates remain elevated.†(source)