According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates rose again last week. Rates were up 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. Mike Fratantoni, MBA’s senior vice president and chief economist, says demand for mortgage applications fell as a result. “Application volumes for both purchase and refinance loans decreased last week due to these higher rates,” Fratantoni said. “While refinance demand is almost entirely driven by the level of rates, purchase volume continues to be constrained by the lack of homes on the market.” Demand for loans to buy homes was down 3 percent last week and is now 31 percent lower than it was at the same time last year. Refinance activity, on the other hand, was down 7 percent week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Nationally, home prices began to soften last June. Mortgage rates jumped early in the year and prospective home buyers began pausing their plans to purchase a house. That slowed price gains. There were even concerns that prices may see sustained declines. According to the latest S&P Case-Shiller Home Price Indices, though, those concerns may have been unfounded. Because, though prices did see a dip in some markets, they’ve now seen consecutive increases in back-to-back reports. Craig J. Lazzara, managing director at S&P, says home prices are just below their 2022 peak. “The modest increases in home prices we saw a month ago accelerated in March 2023,†Lazzara said. “The National Composite rose by 1.3 percent in March, and now stands only 3.6 percent below its June 2022 peak.†But while prices appear to be rebounding, Lazzara says it’s too early to call it a recovery. He also cautions that regional differences remain. In fact, while some cities are seeing significant upward movement, prices in other metros are still seeing declines – especially western cities like Seattle and San Francisco. (source)

In a seller’s market, homeowners with a home to sell don’t have to offer much to lure interested buyers. Just having an available house can be enough. That’s generally been the case for the past few years, with the number of homes for sale lower than normal and buyer demand high. These days, though, market dynamics are changing and so are the number of concessions being offered by sellers. Concessions are when a home seller helps a buyer with closing costs to reduce the amount of upfront money needed to close the deal. And according to one recent analysis, they’re on the rise. In fact, the number of sellers offering concessions has increased 17 percent year-over-year, from 25.5 percent of sellers last year to 42.9 percent through the three months ending in April. But home buyers should know – while the numbers show concessions up significantly from last year – they’ve been trending downward since February, as buyers returned to the market after a slow winter. (source)

The National Association of Realtors’ Pending Home Sales Index measures the number of contracts to buy homes signed each month. Contract signings are an important housing market indicator, since they are a good predictor of future home sales. In April, the NAR’s index was unchanged from the previous month but down from last year at the same time. Regionally, contract activity rose in the Midwest, West, and South but saw an 11.3 percent decline in the Northeast. Lawrence Yun, NAR’s chief economist, says Americans want to buy homes but there are too few for sale right now. “Not all buying interests are being completed due to limited inventory,†Yun said. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.†(source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved higher last week from one week earlier. Rates were up 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. Joel Kan, MBA’s vice president and deputy chief economist, says there are several economic factors pushing rates higher. “Investors remained attuned to the uncertainty around the U.S. debt ceiling and communication from several Federal Reserve officials last week, which sent Treasury yields higher, along with mortgage rates,†Kan said. “Economic data released over the past week have also pointed to a still-resilient economy. The housing market received positive data on new residential construction – which is seen as a key solution to the lack of housing inventory.†Higher rates led to slower demand for mortgage applications, with both purchase and refinance activity falling from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Sales of newly built single-family homes rose in April, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. Sales were up 4.1 percent over the previous month and were nearly 12 percent higher than they were in April 2022. New home sales are now at their highest level in over a year. So why is the new home market so hot? There are a couple of reasons. First off, home buyers were reacting to mortgage rates moving lower after climbing in February and early March. The move toward more favorable rates brought out interested buyers. The other factor is the lack of existing homes for sale. Low inventory has pushed home buyers to consider newly built options, as there are fewer previously owned homes available to buy. Combined with the start of the spring home shopping season, those two factors played a big part in bringing out home buyers and pushing new home sales upward. (source)

There are more interested buyers than available homes for sale this spring. In many areas, that’s pushing home prices higher and cutting the amount of time attractive, affordable listings are on the market before selling. In other words, the market remains fast paced and competitive, and the quickest solution is more homes for sale. Fortunately, it seems home builders are responding. According to the most recent numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, the number of permits to build new single-family homes was at a seven-month high in April, rising for the third consecutive month. Housing starts were also up from the month before, increasing 2.2 percent from March. The numbers are evidence that the new home market is rebounding. It’s also encouraging news for buyers, as the more homes there are for sale, the better conditions will be for buyers of both new and existing homes. (source)

Each month, Fannie Mae’s Economic and Strategic Research Group releases a forecast detailing what they think may be ahead for the housing market and economy. According to their most recent release, the group believes the economy will slow down during the second half of the year but sees the housing market helping to revive it heading into 2024. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says housing continues to outperform expectations and will help cushion any economic slowdown. “Housing remains exhibit number one for why we expect the recession to be modest,†Duncan said. “It continues to outperform our expectations, and we expect that its relative strength will help kickstart the economy into expanding again in 2024.†Still, the group believes there will be a modest recession sometime during the second half of this year – though they acknowledge there are several paths the economy could take and the timing of a potential slowdown remains hard to predict. (source)

New data from the National Association of Realtors shows homes for sale sold faster in April than they did in March. In fact, the typical property sold in just 22 days. That’s down from 29 days the month before, but up from 17 days last year at the same time. Overall, 73 percent of homes sold during the month were on the market less than 30 days. The quickening pace of home sales is a sign that home buyers remain active, despite low inventory and mortgage rate volatility. Still, despite buyer demand, total sales fell in April, dropping 3.4 percent from the month before. Lawrence Yun, NAR’s chief economist, says the market is up-and-down right now. “Home sales are bouncing back and forth but remain above recent cyclical lows,†Yun said. “The combination of job gains, limited inventory, and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.†(source)

The number of existing homes currently available for sale is low. It has been for years. But while that’s been a frustration for buyers, home builders see it as an opportunity. After all, buyers who can’t find an older home may decide to turn to a newly built home instead. These days, that seems to be the case, and it’s driving the recent rise in home builder optimism. The National Association of Home Builders’ Housing Market Index surveys builders each month in an effort to gauge their confidence in the market for newly built homes. The index ranks builders’ responses on a scale where any number above 50 indicates more builders view conditions as good than poor. In May, the index rose for the fifth straight month and reached 50 for the first time since last July. Robert Dietz, NAHB’s chief economist, says buyers are turning to new homes. “Lack of existing inventory continues to drive buyers to new construction,†Dietz said. “In March, 33 percent of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7 percent average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.†(source)