Tag: Orlando Real Estate

You don’t need to be an economist to understand supply and demand. It’s a pretty simple concept. When supply is low and demand is high, prices rise. That’s what’s been happening in the housing market. Home prices have been increasing because a lot of people want to buy a house but there aren’t a lot of homes available to buy. Fortunately, though, there’s reason to believe the inventory crunch that’s pushed prices higher may be starting to ease. According to a new report from the National Association of Realtors’ consumer website, the number of active listings – while still low – has showed improvement. In February, listings were 25 percent lower than one year earlier. That’s down from 28.4 percent in January. Additionally, the last two weeks of February saw more new home sellers enter the market than during the same period in 2021. In fact, the final week of the month saw new listings rise 2.1 percent over year-before numbers. While the gains may seem small, they’re an encouraging sign for buyers, since the number of listings will likely grow as the spring sales season gets underway. (source)

Figuring out how much your down payment will be and where it’ll come from is a big part of getting ready to buy a house. Whether you’re using money from the sale of your current home or saving from scratch, you have to have an idea of how much you’ll have available. Naturally, how much you’ll need depends on the specific house you’re hoping to buy and the terms of your loan. But what does the typical down payment look like these days? Well, according to one recent analysis, the median down payment on single-family homes purchased in the fourth quarter of last year was $26,000. That’s up from the previous year, when it was $21,891, but actually 1 percent lower than in the third quarter. Whatever the case, buyers should know they have options. Though widely recommended, a 20 percent down payment isn’t required. In fact, most home buyers put down less. Last year, for example, the typical down payment for first-time buyers was 7 percent, while repeat buyers averaged a down payment of 17 percent. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up across all 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. Higher rates didn’t have much effect on mortgage applications demand, however. In fact, applications were down less than 1 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says purchase activity has been slow. “Purchase activity remained weak, but the average loan size increased again, which indicates that home-price growth remains strong, and a greater share of the activity is occurring at the higher end of the market,” Kan said. While rates have been up in recent weeks, Kan says events in Ukraine may have an impact on interest rates in the days ahead. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

When there are fewer homes available for sale, those that are on the market receive more interest. After all, it’s easier to get buyers interested in your home, if there aren’t many others to see. That’s the case these days. Simply put, it’s a good time for homeowners who want to sell. How good? Well, according to one recent report, very good. The analysis looked at the average number of home showings per listing in January, which is a pretty accurate way to measure current buyer demand. What they found was – even at a time of year when housing market activity is typically slow – the average number of home showings reached double digits in 83 markets across the country. Nationally, showings were up nearly 8 percent over year-before numbers, and in the top markets they were closer to 15 percent higher than last year. Based on the data, there’s pretty good evidence that the market is still hot, and primed for home sellers, heading into the spring sales season. (source)

There are more millennial home buyers in the housing market than ever before. The generation – roughly defined as those born between 1981 and 1996 – is now reaching, or just past, the age of the typical first-time home buyer. In fact, in 2021, they made up 67 percent of first-time home purchase applications. So what are these buyers looking for in a house? Well, according to one recent analysis, a lot of the same things older buyers want. For example, millennials say they want a house in a safe area, near good schools, and with enough space to raise a family. Affordability is also a big factor. And while you might expect young Americans to want a fast-paced, urban lifestyle, surveys have found that millennials are just as likely to say they’re looking for a place with a big yard in a quiet neighborhood. In other words, millennial buyers’ wish lists aren’t much different than buyers of other generations. They do differ in a couple of ways, though. Among those exceptions, they’re looking for a slightly smaller house than older buyers and are more open to buying a fixer-upper. (source)

Buying a home is a process. There are several steps between the day you’re approved to borrow and the day you get keys to your new home. Among them, having an offer accepted and signing the contract to buy is a big one. Barring something unforeseen, it means you’re a few weeks away from closing on your house and getting ready to move. That’s why, after the contract is signed, the home’s sale is considered pending. It’s also why the National Association of Realtors tracks pending sales each month, because they’re a good indicator of future home sales. According to their most recent report, contract signings fell in January, dropping 5.7 percent from the month before. Lawrence Yun, NAR’s chief economist, says it’s likely because the inventory of homes for sale remains low. “With inventory at an all-time low, buyers are still having a difficult time finding a home,” Yun said. Fortunately, though, listings usually pick up in spring, when the traditional buying season begins. As more homes become available for sale, there will be more options to choose from, which should help slow price increases and competition among buyers. (source)

Affordability is a top concern for today’s home buyers. Mortgage rates have risen recently and home prices continue to climb. But while it may seem like buyers haven’t gotten any good news lately, the most recent new residential construction report from the U.S. Census Bureau and the Department of Housing and Urban Development contains some encouraging signs. The report found that, in January, permits to build new, single-family homes rose 6.8 percent from the month before. And, because spiking home prices are primarily being driven by a historically low number of homes for sale, any news of an increase in new home construction is good news for buyers. After all, as more new homes are built, the balance of supply and demand will become more favorable, which will help slow price increases, competition, and bidding wars. In other words, increasing building permits are a positive sign that the inventory shortage may soon begin to improve, helping affordability and buyers’ chances at finding a good home that fits both their needs and budget.

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased again last week, moving up across all loan categories. Rates were higher than one week earlier 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. For the most part, the increases were small but still enough to slow mortgage application demand. In fact, refinance activity fell 16 percent from the week before, while demand for loans to buy homes dropped 6 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says it was the third straight week purchase-application demand decreased. “Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week,” Kan said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

By now, just about everyone knows home prices rose in 2021. Even if you weren’t shopping for a home last year, you probably came across a headline or news story covering the accelerated pace of price increases. What you may not know, though, is just how high they climbed. New numbers from the S&P Case-Shiller Home Price Indices give us a better idea. According to their most recent release, prices nationwide posted an 18.8 percent increase last year. Craig J. Lazzara, managing director at S&P, says it was the highest in decades. “For the year, the National Composite Index recorded a gain of 18.8 percent,” Lazzara said. “This is the highest calendar year increase in 34 years of data, and substantially ahead of 2020’s 10.4 percent gain.” Fortunately, though 2021 was a record-breaking year for home values, this year’s outlook calls for a much slower rate of increase, as most experts believe the market will begin to balance and price increases will slow considerably. (source)

Each month, Fannie Mae’s Economic and Strategic Research Group releases an outlook covering the housing market and overall economy. The group looks at economic growth and policy, home prices, mortgage rates, and sales expectations. In February, their outlook addresses housing affordability and the likelihood that the market will slow from last year’s frenetic pace. According to the release, they foresee home sales and price increases moderating in 2022. In fact, the group projects home price growth of 7.6 percent this year and 3.3 percent in 2023, down significantly from the double-digit increases seen last year. However, Doug Duncan, Fannie Mae’s senior vice president and chief economist, says there are still some unknowns. “For home buyers, we believe that borrowing costs will likely rise with the increase in mortgage rates,” Duncan says. “What remains unknown is how higher mortgage rates and tighter monetary policy – through expected interest rate hikes and changes to the makeup of the Fed’s portfolio – will impact home prices.” Ultimately, they expect housing activity to be supported by demographic factors and the shortage of homes for sale. (source)