The National Association of Home Builders’ Housing Market Index is a monthly measure of builder confidence in the market for newly built homes. Based on a survey of home builders, the index is scored on a scale where any number above 50 indicates more builders view conditions as good than poor. In December, the index was unmoved from the month before, holding steady at 46. Carl Harris, NAHB’s chairman, says builders continue to have concerns but are optimistic about the future. “While builders are expressing concerns that high interest rates, elevated construction costs, and a lack of buildable lots continue to act as headwinds, they are also anticipating future regulatory relief in the aftermath of the election,” Harris said. “This is reflected in the fact that future sales expectations have increased to a nearly three-year high.” It’s true. The index component measuring expectations for the next six months was up another three points in December, matching its highest level since April 2022. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, average mortgage rates moved higher last week from one week earlier. Increases were seen 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 the increases slowed demand, though home buyers remained active. “Buyers remained active in the purchase market, helped by gradually improving inventory conditions and a more positive outlook on the economy and job market,” Kan said. “Refinance applications declined last week, largely driven by VA refinances that were down 17 percent after two weeks of gains.” Overall, demand for mortgage applications was down 0.7 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)

Home buyers and sellers shouldn’t expect to see too much change in the months ahead, according to a new forecast from Fannie Mae’s Economic and Strategic Research Group. The group’s monthly forecast – which covers their thoughts on where the housing market and economy are headed – says there will be little change in the new year. In fact, the group says, though mortgage rates will decline and prices will decelerate, both will only fall modestly. They also expect sales of previously owned homes to remain relatively slow, while the new home market will be a “bright spot.” In other words, things may look very much the same in 2025 as they did in 2024. Mark Palim, Fannie Mae’s senior vice president and chief economist, says rate volatility may provide buyers with opportunities. “Heightened mortgage rate volatility may present opportunities for would-be home buyers to take advantage of temporary lows, and we may see stretches where housing activity is boosted by lower rates – but, on average, we expect mortgage rates to remain elevated and a hindrance to activity,” Palim said.” (source)

When the pandemic first hit in March 2020, there weren’t many people thinking it would inspire prospective home buyers, but it did. With mortgage rates at historic lows and Americans able to move more freely due to remote work, buyer demand spiked. Now, just under five years later, those same pandemic-era home buyers may already be looking to sell. In fact, according to a new survey, 17.5 percent of current homeowners say they plan to sell their home next year and, among them, 32.2 percent have lived in their home less than five years. That’s a significant share of soon-to-be home sellers who have only been in their house a few years. What’s behind the data? Well, the most active group of would-be home sellers are in their 30s and 40s, which is the right demographic for move-up buyers. That same group of home sellers were also able to build up equity quickly over the past five years, allowing them to use those gains to get in the market sooner than they otherwise may have. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. Rates were down across most loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 5/1 ARMs. Rates for 15-year fixed-rate loans were unchanged week-over-week. With rates down for the third straight week, mortgage application demand moved 5.4 percent higher. The improvement was mostly due to a spike in refinance demand, but Joel Kan, MBA’s vice president and deputy chief economist, says home buyers also remain active. “Purchase applications remained relatively strong and have shown annual gains in all but one week over the past three months,” Kan said. “In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow in many markets.” Demand for loans to buy homes is now 4 percent higher than 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)

Each month, Fannie Mae surveys Americans and asks them for their opinion on whether it’s a good time to buy or sell a home, mortgage rates, home prices, their job and financial situation. The resulting Home Purchase Sentiment Index is a good gauge of how Americans are feeling about market conditions and the overall economy. According to the most recent release, survey respondents are feeling more confident and it’s mostly due to a sense that mortgage rates are going to fall. In fact, a record share of respondents said they expect rates to fall over the next year and it helped push the number who say it’s a good time to buy 6 percent higher. Mark Palim, Fannie Mae’s senior vice president and chief economist, says optimism has risen as Americans have adjusted to market conditions. “Notably, this improvement in sentiment continues a trend that began about two and a half years ago likely due in part to consumers’ slow-but-steady acclimation to current market conditions,” Palim said. Respondents are also feeling optimistic about their financial situation and home prices, both of which they expect to improve in 2025. (source)

Affordability is always a top concern for home buyers and, according to a new survey from Fannie Mae’s Economic and Strategic Research Group, that isn’t likely to change any time soon. The group surveyed housing and mortgage industry experts and found that they expect affordability conditions to continue to weigh on buyers in the new year. The good news, though, is respondents also said they believe home price increases will slow in 2025. Mark Palim, Fannie Mae’s senior vice president and chief economist, agrees. “We share our panelists’ view that home price growth is likely to decelerate next year, as the mix of continued elevated mortgage rates and the run-up in home prices of the past four years will likely continue to strain affordability and remain an impediment to many would-be home buyers,” Palim said. Fannie Mae’s fourth quarter Home Price Expectations Survey shows home prices increasing 3.8 percent in 2025, after projecting a 5.2 percent growth in 2024. (source)

The end of the year is prediction season. Experts and insiders in every industry release future forecasts offering their take on what will happen over the next 12 months. The housing market is no exception. The National Association of Realtors’ consumer website, for example, recently released an outlook for 2025 and it looks to be good news for home buyers. The forecast says the housing market will find better balance in the year ahead, with the number of homes for sale reaching its highest level since 2019. More available homes for sale will result in less competition between buyers and more sellers cutting prices on listed homes. Mortgage rates are also expected to improve in 2025, though the improvement will likely be slow and gradual. Overall, increased inventory will help buyers find better choices and improved conditions but the market will still be costly, according to the website’s forecast. Affordability conditions will remain particularly challenging in areas where inventory has yet to rebound. (source)