Fannie Mae’s Home Purchase Sentiment Index measures how Americans feel about their finances, the economy, their job, and the housing market. Based on a monthly survey, the index gauges whether consumers believe mortgage rates and home prices are headed up or down, whether they think it’s a good or bad time to buy or sell a home, and whether their personal finances and job security has improved or worsened over the past year. According to the most recent results, Americans are feeling cautious about the housing market, with an increasing number of survey respondents saying they believe mortgage rates and prices will continue to rise. But while participants are clearly worried about affordability, the vast majority say they think it’s still a good time to sell. In fact, 63 percent said they think now’s the right time. However, among them, a growing number list elevated rates as a reason to hold off. Doug Duncan, Fannie Mae’s chief economist, says homeowners aren’t eager to give up their current rate. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon …†Duncan said. (source)

A lot about the way we live changed during the pandemic. Some of those changes were temporary. Others, though, are here for the long term. Remote work, for example. The Internet made working from a home a possibility but it was the pandemic that turned it into a reality. Now, more than three years later, it’s clear that remote work is here to stay. So are the changes it brought to the housing market. With more people able to work from anywhere, ideas about how and where we want to live changed too. People who no longer needed to consider their commute were free to live wherever they’d like – and many took advantage. That led to growing demand for privacy, space, and affordability which pushed buyers further from urban centers and out into the suburbs and exurbs. The subsequent surge in competition for homes, higher prices, and faster sales in those areas has largely continued ever since, as remote-working home buyers exchange proximity to city centers for more space and lower costs. (source)

The housing market has an inventory problem. The lower-than-normal number of homes for sale has prices rising and home buyers frustrated. But while year-over-year numbers show fewer homes on the market and prices higher than last year, monthly data tells a different story. In fact, it shows some short-term improvement. For example, according to newly released numbers from the National Association of Realtors’ consumer website, inventory increased in September from the month before, rising nearly 5 percent. That’s a significant bump, and at a time of year when the housing market typically begins to slow down. Additionally, the analysis found a rising number of homes saw price reductions during the month. The increase in price cuts – also unusual for the season – is an encouraging sign for fall buyers. Danielle Hale, the website’s chief economist, says it’s a break for buyers but challenges remain. “An uptick in homes with reduced prices is a small break for buyers on top of the usual seasonal factors that align to make [the] first week in October the best week to buy,†Hale said. “Yet, the larger context remains challenging. Buyers still struggle with the triple threat of rising listing prices, record-high mortgage rates, and limited inventory, making affordability a continued concern.†(source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week from one week earlier. Rates rose 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. Joel Kan, MBA’s vice president and deputy chief economist, says rates have been moving higher in recent weeks. “Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields,†Kan said. “Rates for all mortgage products increased, with the 30-year fixed mortgage rate increasing for the fourth consecutive week …†Because of increasing rates, demand for mortgage applications fell during the week, with demand for loans to buy homes down 6 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

These days, home buyers face a number of challenges. With prices and mortgage rates both up and the supply of homes for sale down, the market has gotten more difficult over the past year and a half. But not all the news is bad for buyers. For example, according to the Mortgage Bankers Association, median mortgage payments were relatively flat this summer. The MBA’s Purchase Applications Payment Index measures new monthly mortgage payments based on the loan applications of recent home buyers. The latest results show the median payment rising just $8 in August from the month before. That brought it to $2,170 – about the same as it was in May when it came in at $2,165. Edward Seiler, MBA’s associate vice president, housing economics, and executive director of the Research Institute for Housing America, says there could be even better news ahead. “If mortgage rates shift lower in 2024 as we anticipate, the combination of rising inventory levels and lower rates should lead to stronger demand for buying a home,†Seiler said. (source)

Home shoppers focus their energy on the type of house they want and the features they’d like it to have. Things like the number of bedrooms, the size of the kitchen, and the available outdoor space are the first things they check when an interesting listing pops up. It makes sense. After all, too few bedrooms or a small kitchen can be a deal breaker. But while the layout of the house and the condition of the physical structure are obviously top considerations, there are other external factors that will also have an impact on how much you like your new place. Like your prospective neighbors. It’s almost impossible to know how well you’ll get along with your future neighbors before you buy, but they matter. In fact, a recent survey found 92 percent of Americans know at least a few of their neighbors on a first-name basis and 85 percent plan to stay in their current home long term. That means, when you buy a house, you’re also buying a potentially long-lasting relationship with the people who live near it. (source)

When you buy a home, you’re making an investment in the housing market. It may not be your primary reason for buying or your focus while living there, but it’s an investment nevertheless. The ups-and-downs of the market will affect your home’s value, how much equity you gain, and your options should you decide to move. In other words, market conditions should matter to you whether you’re a prospective home buyer or a current homeowner. So how’s the market doing? Well, according to a recent analysis of the total value of the U.S. housing market, it’s surging. The analysis found the total value of every home in the country is now around $52 trillion – up 2.6 trillion over the past year and $1.1 trillion higher than its previous peak last June. The surge in value can be attributed to a couple of factors, including rising home prices and an increase in new homes built this year. (source)

There are typically several weeks between when a contract to buy a home is signed and when the home’s sale closes. During this time, the sale is considered pending. Once it closes, that pending sale will become a final sale. That’s why the National Association of Realtors’ Pending Home Sales Index keeps track of contract signings each month. They’re considered a good future indicator of where home sales numbers are headed. According to the NAR’s most recent release, signings dipped in August. In fact, pending sales fell 7.1 percent from the month before. Lawrence Yun, NAR’s chief economist, says the drop coincides with mortgage rate increases. “Mortgage rates have been rising … since August, which has diminished the pool of home buyers,†Yun said. “Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets.†Whether it was mortgage rates or the start of a late summer slowdown, the drop means existing-home sales data is likely to see a similar dip in the near future. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes fell 2 percent last week from one week earlier. The decline follows a 2 percent increase the week before and puts purchase loan demand 27 percent lower than it was last year at the same time. Joel Kan, MBA’s vice president and deputy chief economist, says elevated rates and low inventory are holding buyers back. “Overall applications declined, as both prospective home buyers and homeowners continue to feel the impact of these elevated rates,†Kan said. “The purchase market, which is still facing limited for-sale inventory and eroded purchasing power, saw applications down over the week and 27 percent behind last year’s pace.†Refinance activity also fell during the week, slipping 1 percent from the week before. The declines came during a week when average mortgage rates were up across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, FHA loans, 15-year fixed-rate loans, and 5/1 ARMs. (source)

The S&P Case-Shiller Home Price Index is among the most closely watched measures of U.S. home prices. The index covers all nine census divisions and has been collecting data for nearly 30 years. According to the most recent release, home prices are climbing and have now made up for the declines that began last summer. Craig J. Lazzara, managing director at S&P, says the rebound has been broad based. “We have previously noted that home prices peaked in June 2022 and fell through January 2023, declining 5 percent in those seven months,†Lazzara said. “The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based.†Still, regional differences remain, with prices up most in the Chicago, Cleveland, and New York metro areas, while Las Vegas and Phoenix saw year-over-year declines. (source)