Competition has cooled in the housing market. In fact, according to one recent analysis, competition among home buyers is back to pre-pandemic levels after many years of bidding wars and spiking prices. That’s put buyers in a better bargaining position. So, what changed? Well, an increasing number of homes for sale. The supply of available homes is now 20 percent higher than last year, with new listings up 7.6 percent from the same time one year ago. And the improvement is widespread. In 44 of the 50 largest metro areas, listings are now higher than year-before levels. That gives buyers more options to choose from and more power to negotiate. It also forces sellers to price their homes correctly. As a result, nearly 25 percent of listings saw a price cut in April – the highest share in more than five years and another indication buyers may be in better position as the summer market approaches. (source)

Builders grew less confident in May, according to a new survey from the National Association of Home Builders. The group’s monthly Housing Market Index – which scores a survey of builders on a scale where any number above 50 indicates more builders view conditions as good than poor – came in at 34 in May, down six points from April. Buddy Hughes, NAHB’s chairman, says builders see better conditions ahead. “The spring home buying season has gotten off to a slow start as persistent elevated interest rates, policy uncertainty, and building material cost factors hurt builder sentiment in May,†Hughes said. “However, the overwhelming majority of survey responses came before the tariff reduction announcement with China. Builders expect future trade negotiations and progress on tax policy will help stabilize the economic outlook and strengthen housing demand.†Of the three index components, the measure of future expectations was the highest scoring at 42, while the gauge of current sales conditions fell eight points to 37. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were relatively flat last week, with little movement seen across most loan categories, including 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 while rates remain elevated and economic uncertainty continues to linger, home buyers have quietly pushed purchase demand higher. Mike Fratantoni, MBA’s senior vice president and chief economist, says demand for loans to buy homes is up from last year. “The news for the week was the growth in purchase applications, up 2.3 percent and almost 18 percent higher than last year’s pace,†Fratantoni said. “Despite the economic uncertainty, the increase in home inventory means there are additional properties to buy, unlike the last two years, and this supply is supporting more transactions.†Refinance activity is also up year-over-year, now 44 percent higher than it was the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Anything you buy new is going to be more expensive than buying it after it’s been around a while. Over the years, that’s certainly been the case in the housing market. New homes are more expensive than older homes, almost always. But according to a new report from the National Association of Realtors’ consumer website, the median list price for a newly built home has fallen and, at $448,393 during the first quarter of this year, the median new home is now only about $45,000 more expensive than the median existing home. Danielle Hale, the website’s chief economist, says builders are filling the affordability gap. “America is short, approximately, four million homes, and new construction is stepping in to fill the affordability gap left by a tight existing home market,†Hale said. “Builders are delivering smaller homes at lower prices and often offering financial incentives that make monthly payments more manageable.†The price gap between new and existing homes is now at its lowest level in five years. (source)

The housing market is never perfectly balanced but, in recent years, the gap between the number of homes for sale and the number of interested buyers grew historically large. The inventory of homes for sale hit all-time lows as buyer demand spiked and it led to increasing competition, higher prices, and more bidding wars. Fortunately, things have evened out somewhat since then due, in part, to the rising number of new homes being built across the county. In some areas, the rate of new home construction has helped flatten price spikes and given buyers more options when shopping for homes. In other regions, new home construction hasn’t kept up. One of the primary reasons is a lack of available lots. According to one new analysis, the lack of lots has been an issue since 2017 and is especially pronounced in the areas where new homes are needed most. The good news, though, is the same analysis found a 12 percent year-over-year increase in the number of available lots, a sign that lot development efforts over the past several years are starting to pay dividends. (source)

The housing market isn’t as frenetic as it was just a few years ago. But while the market has calmed and skyrocketing prices have finally slowed, that doesn’t mean homeowners aren’t still in great shape. In fact, according to new numbers from ATTOM Data Solutions, homeowners are doing historically well. ATTOM’s latest U.S. Home Equity and Underwater Report found the share of homes that could be considered equity rich – meaning the combined loan balances secured by those properties is less than half their market value – remains high by historical standards. The data shows 46.2 percent of mortgaged homes could be considered equity rich during the first quarter of this year, down from a peak of 49.2 percent during the second quarter of last year. Rob Barber, ATTOM’s CEO, says the dip isn’t cause for concern. “Home equity rates are near their highest points in recent years and the dip we’ve seen early this year in the proportion of equity-rich homes shouldn’t cause too much concern,†Barber said. “In each of the two previous years, the first quarter marked the lowest point of the year before the proportion of equity-rich homes shot back up in the second quarter.†In other words, things are good and may get even better. (source)

Each month, Fannie Mae conducts a survey of Americans to gauge perception of the housing market and overall economy. The survey asks participants whether they believe mortgage rates and home prices will go up or down over the next year, how secure they feel in their jobs, whether their income has increased or decreased, and whether they believe now is a good time to buy or sell a home. The resulting Home Purchase Sentiment Index is a measure of how consumers feel about today’s market. According to the most recent release, Fannie Mae found sentiment improved in April, with the index up 1.1 points from the month before. Among the highlights, the survey found that, though participants still feel cautious, the share who believe it’s a good time to buy a home increased 1 percent from the month before. The number of respondents who say it’s a good time to sell, on the other hand, fell from the previous month. Also, Americans say they think home prices will increase over the next year but mortgage rates will stay about the same. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down or unchanged 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 economic news led to the decline. “The economic news last week included a negative reading for first-quarter GDP growth and further signs of a contraction in the manufacturing sector, mixed with a solid employment report for April,†Fratantoni said. “The net impact on mortgage rates was mostly downward but just back to levels from early April.†As a result, conventional purchase application volume was up 13 percent week-over-week and 9 percent higher than last year at the same time. Overall, demand for mortgage loan applications increased 11 percent last week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Everybody’s had buyer’s remorse at one time or another. It’s a fairly common phenomenon. It’s especially common among home buyers. After a such a large financial transaction, it’s hard not to look back and wonder what you could have done differently. But what about sellers? Do they also have regrets? Well, according to one new analysis, the answer is yes. Recent home sellers were just as likely to express regret after closing on the sale of their house as buyers. In fact, the vast majority said they had some regrets. The report found 84 percent of recent sellers said they’d change something about the sale of their house if they could do it over again, and 49 percent said they didn’t get everything they wanted out of the experience. That’s a significant share. The top regret among sellers, of course, was wishing they’d priced their home differently – not doing enough to prep their home came in second. (source)

If you’re a prospective home buyer who is concerned about affordability levels, the Mortgage Bankers Association has some good news for you. Its monthly Purchase Applications Payment Index – which measures the typical mortgage payment based on loan amounts applied for by borrowers – found mortgage payments fell to start the spring. In fact, the typical payment decreased to $2,173 in March, down from $2,205 the month before. For borrowers applying for lower-payment mortgages, payments fell to $1,499. Edward Seiler, MBA’s associate vice president, Housing Economics, and executive director, Research Institute for Housing America, says the improvement was due to lower mortgage rates. “Home buyer affordability conditions improved slightly in March, as lower mortgage rates spurred renewed activity in the housing market,” Seiler said. “Despite improving conditions in March, the outlook in the upcoming months is cloudier.” Seiler says economic uncertainty is making home buyers more hesitant and could affect conditions in the months ahead. (source)