Sales of previously owned homes fell 4.9 percent in January, according to the National Association of Realtors. The month-over-month decrease included declines in the South, West, and Northeast. The Midwest was unchanged from the month before. Lawrence Yun, NAR’s chief economist, says affordability remains a challenge. “Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” Yun said. “When combined with elevated home prices, housing affordability remains a major challenge.” Despite the challenge, though, sales were above last year’s level in all regions but the South, which was unchanged. Overall, existing-home sales were 2 percent higher year-over-year in January, marking the fourth consecutive annual increase. Also in the report, total housing inventory was up nearly 17 percent from last year at the same time. (source)

New home construction plays an important role in housing market conditions. When builders are building more homes, the added supply helps level the market and keeps home prices from spiking. Which means, if you’re a prospective home buyer, the number of new homes being built affects you – whether you’re buying a new home or not. So, how’s new residential construction doing these days? Well, the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development shows the number of new, single-family homes that began construction in January was down 8.4 percent from the month before. That’s a significant decline, but analysts say snowstorms and frigid temperatures were the primary reason for the decrease. Winter weather affected much of the country in January and brought numbers down in the Midwest, Northeast, and South. The West, on the other hand, saw a 24.9 percent surge in home building. Overall, the number of single-family homes that began construction in January was just 1.8 percent below last year at the same time. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with slight declines for 30-year fixed-rate loans with conforming balances, 15-year fixed-rate loans, and 5/1 ARMs and increases for FHA and jumbo loans. With rates still elevated, demand for loans to buy homes fell 6 percent week-over-week. Joel Kan, MBA’s vice president and deputy chief economist, says demand was at its slowest pace since the start of the year. “Mortgage rates decreased on average over the week, as markets brushed off unexpectedly strong inflation data,” Kan said. “Despite mortgage rates declining … mortgage applications decreased to their slowest pace since the beginning of the year. Purchase applications were down for the week, as buyers remained on the fence, although loosening inventory may help support activity in the coming months.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Home builders know the housing market as well as anyone. Maybe more. Builders have to know what buyers want, where they want it, and what they’re willing to pay. That’s why the National Association of Home Builders keeps a monthly measure of home builder confidence. After all, if home builders are feeling good about market conditions, chances are the market is in good shape. According to the most recent results of the NAHB’s index, builder confidence slipped back in January after recent gains. The index is scored on a scale where any number above 50 indicates that more builders feel good about conditions than poor. January saw a five point drop to 42. Carl Haris, NAHB’s chairman, said the decline was due to uncertainty about new government policies. “While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations …” Harris said. “Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023.” (source)

Most of us will need a loan to buy a house. But access to credit isn’t fixed. That means it’ll be easier to get approved for a loan at some points more than others. Ultimately, it depends on current lending standards and available loan programs, which is why the Mortgage Bankers Association tracks them with its Mortgage Credit Availability Index. The monthly measure of whether credit is loosening or tightening is a good gauge for prospective buyers as they get their finances in order. Joel Kan, MBA’s vice president and deputy chief economist, says the most recent results should be encouraging. “Credit availability increased to start 2025, driven by conventional credit supply rising to its highest level since June 2022,” Kan said. “There were expanded loan offers for cash-out refinances, along with more jumbo and non-QM loan programs. Although similar to last month, these were limited to borrowers with better credit. All other subindexes saw increases in January, a positive development for the spring home buying season, if these trends continue.” (source)

January isn’t thought of as being among the housing market’s hottest months for home buyers. Buyers are more likely to have their plans on hold in the middle of winter, while they wait to see what the spring market might have to offer. This year, though, January was good to buyers. In fact, it actually broke records. How so? Well, according to one new analysis, it was the best January on record for home seller price cuts. Nearly 23 percent of home sellers lowered their price during the month, giving buyers a break on affordability conditions at a time when mortgage rates were at an eight-month high. The number of cuts was the highest for any January since 2018 and joins a growing list of signs pointing to easing conditions this year. With price increases and mortgage rates expected to calm and new listings rising, home buyers can expect a more favorable market, whether they’re ready to buy today or waiting for spring. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates saw a slight dip last week from one week earlier. Rates were down for 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 were unchanged from the week before and 5/1 ARMs increased. The improvements, though slight, led to a bump in mortgage application demand. Joel Kan, MBA’s vice president and deputy chief economist, says the gains were driven by increasing refinance activity. “Mortgage rates moved slightly lower last week, which led to the pace of refinance applications reaching its strongest week since October 2024,” Kan said. “The average loan size for refinance borrowers increased, as these borrowers tend to be more responsive for a given change in rates.” Demand for loans to buy homes was down from the week before but still up 2 percent from 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)

Real estate, it’s said, is all about location – and it’s true. Especially, these days. The number of homes currently available for sale varies wildly in markets across the country. That means some markets, where inventory remains low, are seeing faster price increases and more competition than others where inventory has rebounded more quickly. So, which regions of the country have closed the inventory gap the fastest? According to one analysis, the differences are pretty stark. For example, in the South, the number of homes available for sale is just 10 percent lower than pre-pandemic levels. Similarly, the West has rebounded within 13.3 percent of its pre-pandemic norm. The Midwest and Northeast, on the other hand, continue to face a significant gap, with midwestern markets down 43.6 percent from their 2017-2019 level and the Northeast still down 58.1 percent. One reason for the disparity is home building, which has been more robust in southern and western states. That’s helped to raise inventory levels – and calm price increases – more quickly in those areas. (source)

Your mortgage payment is likely going to be among your biggest monthly bills. So, it’s important to know what to expect. That’s why the Mortgage Bankers Association tracks the national median mortgage payment each month. Its Purchase Applications Payment Index looks at the payment amounts applied for by borrowers purchasing a home and measures those against income to determine affordability conditions over time. According to the most recent results, the national median payment fell slightly in December to $2,127. Compared to year-before levels, that’s just $72 higher than it was at the end of 2023. Edward Seiler, MBA’s associate vice president, Housing Economics, and executive director, Research Institute for Housing America, says this year should be even better. “2024 was a sluggish year for home sales because of weak affordability conditions throughout the country,” Seiler said. “MBA expects 2025 conditions will improve as housing supply increases, giving prospective buyers more options and putting less pressure on their budgets.” (source)

Fannie Mae’s monthly Home Purchase Sentiment Index is based on a survey of Americans which asks for their opinions on the housing market, buying and selling a home, prices, mortgage rates, their financial situation and job. According to the most recent release, Americans were feeling slightly more optimistic in January, as the index ticked up 0.3 points from the previous month. The gains included improvement in consumer optimism toward both buying and selling a home, despite an increasing number of respondents who believe home prices and mortgage rates will rise over the next 12 months. Kim Betancourt, vice president of multifamily economics and strategic research, says Americans aren’t expecting too much change. “Consumers seem increasingly pessimistic that housing affordability conditions will improve across the board, as a growing share expects home prices, rent prices, and mortgage rates will all go up,” Betancourt said. Still, survey respondents said they feel secure in their job and report that their household income is higher than it was last year at the same time. (source)