The National Association of Home Builders’ Housing Market Index measures how confident builders are in the market for new homes. In January, the index saw its second straight monthly improvement, as home builders expressed growing optimism about current sales conditions and prospects for the first half of the year. Alicia Huey, NAHB’s chairman, says the gains are due to lower interest rates. “Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,†Huey said. “Single-family starts are expected to grow in 2024, adding much needed inventory to the market.†The index – which is scored so that any number above 50 indicates more builders feel conditions are good than poor – rose seven points in January to 44, with the component measuring expectations for the next six months up 12 points to 57 – the first time it reached positive territory since August. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell across all loan categories last week, 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 decline brought rates to the lowest level in three weeks. It also led to a spike in demand for mortgage applications, according to Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications,†Kan said. “Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market.†The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

For the most part, people sell their home because they want to buy a different one. Which means, if you’re a home seller, you’re also likely a home buyer. It also means there are likely more than a few potential home sellers who are ready to move but have been waiting for affordability conditions to improve before becoming a buyer again. After all, an affordable monthly payment isn’t an easy thing to give up. So now that rates have fallen over the past few months, are more homeowners ready to sell? According to one new survey, the answer is yes. In fact, the survey found the share of homeowners who say they’re considering selling within the next three years climbed 6 percent from last year. That’s a significant increase. The survey also found homeowners with a mortgage rate below 5 percent were just as likely as those with higher rates to say they’re thinking about selling. Whether or not these homeowners actually sell remains to be seen but, if they do, it could lead to an inventory bump and a better balanced market. (source)

According to recently released housing market forecasts, economists expect a better year for home buyers in 2024. Mortgage rates have started to come down after climbing higher over the past year and a half. Home price increases have slowed in most parts of the country. Even the inventory shortage is expected to get better this year. There’s a general sense that the housing market will improve in the months ahead. And according to a new survey from the National Association of Realtors’ consumer website, that feeling has first-time home buyers optimistic about their prospects. In fact, the survey found, among Americans expecting to buy their first home in 2024, 61 percent say they think now is the right time to buy. Danielle Hale, the website’s chief economist, says that’s a change from last year. “Buying a first home can be a daunting task,†Hale said. “Couple high interest rates with historically low inventory of homes available for sale in 2023, and hopeful buyers have faced a particularly challenging market.†Fortunately, with affordability improvements on the horizon, first-time buyers are feeling better positioned, with 40 percent saying they’ll be able to afford to buy within the year. (source)

Mortgage rates have calmed recently. In fact, they’ve fallen pretty significantly since reaching highs last October. But while rates have given buyers some relief over the past few months, they remain elevated compared to the historic lows seen during the pandemic. In other words, rates are still a factor for potential home buyers – especially younger buyers. But while 67 percent of millennials say they regret not buying when rates were at all-time lows, they aren’t discouraged by today’s rates. In fact, according to a recent survey, 78 percent of respondents said they’d accept a rate higher than the national average and 65 percent said they’d still buy even if rates were almost double what they are now. It seems millennials who are in the market for a home aren’t going to let rates determine when they buy. Mostly, that’s because the majority of millennial respondents said they plan to refinance in the future if, and when, better rates become available. (source)

In a challenging housing market, home buyers need to stay flexible. That means considering everything from buying a house that needs some work to buying a house in a neighborhood farther from home. These days, with prices and mortgage rates pushing buyers’ budgets, some shoppers have even weighed interstate moves. Of course, moving to another state is a big commitment and isn’t for everyone but one recent study found buyers who take the leap have found big savings after hitting the road. In fact, buyers who moved across state lines saved an average of $7,500 on the home they purchased. That’s up significantly from 2019, when interstate buyers only saw a savings of $2,800. So where are interstate movers most likely to go? Well, the study found cities in the South dominated the top five markets for out-of-state moves, with Charlotte, Raleigh, and Orlando all on the list. Affordable markets were also found in the Midwest and Northeast. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications was up 9.9 percent during the first week of the year. The gains included a 6 percent increase in demand for loans to buy homes and a 19 percent spike in refinance activity. Joel Kan, MBA’s vice president and deputy chief economist, says the improvement came despite a rate increase. “Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,†Kan said. “The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines.†Average rates were up across all loan categories last week, including for 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 MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The number of homes for sale typically falls during the holiday season. After all, potential sellers generally prefer to put their move on hold until after the new year, if they have the option. Because of this, the inventory of available homes typically decreases somewhere between 7 and 13 percent in December from November. Last year was no different. But while inventory declined, it only fell 5.5 percent, according to new numbers from the National Association of Realtors’ consumer website. Combined with the fact that newly listed homes were up 9.1 percent over year-before levels, the data may be a sign that inventory levels will rebound this year, which would be a positive turn for home buyers. Danielle Hale, chief economist for the website, says the improvement is encouraging but modest. “We are optimistic that inventory levels are moving in a positive direction, but the number of homes on the market is still low relative to pre-pandemic levels.†Hale said. “Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes.†(source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans which asks participants for their view of the housing market and economy. Participants are asked whether they feel now is a good or bad time to buy or sell a home, where they think mortgage rates and prices are headed, and about their personal financial situation and job security. According to the most recent results, Americans are feeling more optimistic about home buying conditions and specifically mortgage rates. In fact, a survey-high 31 percent of respondents said they feel rates will fall over the next 12 months. The expected rate drop has also boosted the number of participants who say they feel now is a good time to buy a home, with a 3 percent increase over the previous month’s results. Mark Palim, Fannie Mae’s vice president and deputy chief economist, says the results indicate Americans feel affordability may ease this year. “A more optimistic rate outlook among consumers may signal an expectation that home affordability pressures will ease in 2024,†Palim said. (source)

The first thing a prospective home buyer has to plan for financially is the down payment. It’s a significant amount of money to come up with and you need to have a plan to cover it and closing costs. After that, though, it’s time to start thinking about your potential monthly mortgage payment. It’s likely to be among your biggest bills and you want to make sure it works with your budget and won’t cause you financial stress. So what is the typical mortgage payment these days? Well, according to the Mortgage Bankers Association, the median monthly mortgage payment is now $2,137. The good news for buyers, though, is that falling rates have payments trending lower. Edward Seiler, MBA’s vice president, housing economics, and executive director of the Research Institute for Housing America, says affordability conditions have been easing. “Home buyer affordability improved in November, with a decline in mortgage rates providing relief to prospective home buyers,†Seiler said. “MBA expects that affordability conditions will continue to improve as mortgage rates decline, which should generate increased demand heading into the spring home buying season.†(source)