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Americans Say It’s A Good Time To Sell

The percentage of Americans who say it’s a good time to sell a house rose 26 percent year over year, according to the December results of Fannie Mae’s monthly Home Purchase Sentiment Index. The survey – which asks Americans what they think about buying or selling a home, mortgage rates, home prices, their jobs, and household income – was relatively flat from the month before. However, year-over-year comparisons show a large spike in the number of respondents who think it’s a good time to sell – while the number who believe it’s a good time to buy saw a significant drop. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the results may be a sign that the housing market will soften this year. “The HPSI’s underlying components changed dramatically in the last 12 months – particularly the two related to home-buying and home-selling sentiment – and we have seen the index drift slightly downward since March 2021, an indication that the housing market may begin to soften in the coming year,” Duncan said. (source)

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New Listings Bounce Back In Many Metros

Shopping for a home to buy can be challenging in markets where there aren’t many homes for sale. For one, it’s more difficult to find an available house in the right neighborhood with the right features. Then, when you do find one, you often have to outbid other prospective buyers who also want it. But, while the number of homes for sale is still lower than normal, you shouldn’t let the current inventory crunch put your home-buying plans on hold. Why? Well, there’s an expectation that this year’s market will see inventory rebound from the declines suffered in 2021. And, according to a new report from the National Association of Realtors’ consumer website, there is already evidence that new listings are beginning to bounce back. In fact, December data shows 20 percent of the 50 largest U.S. metros saw more new sellers enter the market than last year at the same time – and some of those cities saw double-digit increases. That doesn’t mean those markets won’t still be competitive but it does offer hope to home buyers that they’ll have an easier time finding a house that fits their needs. (source)

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Mortgage Rates Mostly Flat To End 2021

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat during the final two weeks of December. Rates 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 saw little movement from the week before. But, while rates were relatively unchanged, they remained at their highest level since April 2021, which – along with the holiday season – slowed demand for mortgage applications. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says demand fell for both refinance and purchase loans. “Refinance demand continues to dwindle, as many borrowers refinanced in 2020, and in early 2021 – when mortgage rates were around 40 basis points lower,” Kan said. “The purchase market also finished the year on a slower note, with the final week coming in at the weakest since October 2021.” Still, 2021 was a record year for purchase originations and the MBA expects this year to be even stronger. (source)

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Housing Remains Hot Despite Seasonal Slowdown

The housing market typically slows down at the end of the year. The reasons for this aren’t difficult to understand. Between harsher weather and the holidays, not a lot of people have moving on their mind during the month of December. But while the market has been experiencing a typical seasonal slowdown, it remains hot when compared to pre-pandemic levels. For example, a look at recently released numbers shows that the number of homes for sale with an accepted offer within one week was nearly double what it was during the same period in 2019, jumping from 15.8 percent two years ago to 29.6 percent in 2021. Similarly, the median number of days homes were on the market has nearly doubled from 2019. New listings and pending sales have also spiked compared to their pre-pandemic level. Simply put, the winter market has slowed down but continues to run hotter than normal, when compared to an average year. (source)

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What’s Ahead For The Housing Market In 2022?

There’s a natural inclination at the beginning of the year to look forward. The new year offers us a fresh start and a great time to set goals. For a lot of us, one of those goals will be to buy a house. But what should we expect out of the housing market in 2022? Well, according to a survey of more than 20 top economic and housing experts conducted by the National Association of Realtors, we can expect the market to normalize. “Overall, survey participants believe we’ll see the housing market and broader economy normalize [this] year,” Lawrence Yun, NAR’s chief economist, said of the survey’s results. “Though forecasted to rise 4 percent, inflation will decelerate after hefty gains in 2021, while home price increases are also expected to ease with an annual appreciation of less than 6 percent.” Survey participants expect home sales to fall slightly from 2021 but they also see an uptick in the number of new homes built. And, while they expect mortgage rates to move higher, the increases aren’t expected to push rates higher than their pre-pandemic level. (source)

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Americans Look To Move Somewhere Less Expensive

If you’re like most Americans, your monthly mortgage payment will be among your biggest bills. That’s why it’s important for prospective home buyers to crunch the numbers before shopping for a house. Knowing how much you can comfortably afford will help you avoid buying a house that causes you financial stress. And these days, that’s a factor. The pandemic has led to more economic uncertainty and it has a lot of us thinking about our bills. For example, in one recent survey, nearly 50 percent of participants said they’ve worried about their house payment during the past month. And those worries – along with increasing opportunities for remote work – have many of us looking to move somewhere more affordable. In fact, the same survey found 45 percent of respondents considering a move to a less expensive area. It’s a common theme, lately. Since the beginning of the pandemic, many surveys have found a growing number of Americans interested in moving to smaller metros, suburbs, exurbs, and anywhere else they can get more house for their money. (source)

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Homeownership Affordable On Average Wage

Buying a home has become less affordable over the past year. Home prices have surged as buyer demand outpaced the inventory of homes for sale. But while homeownership has gotten less affordable, it’s still within the average Americans’ financial means, according to a new report from ATTOM Data Solutions. Their fourth-quarter 2021 U.S. Home Affordability Report found that the cost of owning a median-priced home now consumes about 25 percent of the average national wage of $65,546. That’s within the 28-percent standard lenders use to determine whether or not borrowers can afford a monthly mortgage payment, insurance, and taxes. In other words, homeownership may have gotten less affordable but it hasn’t become unaffordable. “The average wage earner can still afford the typical home across the United States, but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward,” Todd Teta, ATTOM’s chief product officer, said. Teta says rising wages and still-low mortgage rates are helping to balance home-price increases, which has kept the cost of homeownership manageable. (source)

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Pending Home Sales Fall 2.2% In November

The National Association of Realtors’ Pending Home Sales Index tracks the number of contracts to buy homes that are signed each month. Because it tracks contract signings, not closings, it can be a good indicator of future home sales. In November, the index found pending sales down 2.2 percent from the month before. Lawrence Yun, NAR’s chief economist, says home buying conditions are challenging right now but relief may be on the way. “There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” Yun said. “While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.” Regionally, contract signings were mostly flat except for in the Midwest, where they fell 6.3 percent. The West also saw a decline, with contract activity down 2.2 percent month over month. (source)

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Home Prices Increase But At A Slower Pace

These days, housing market conditions are fairly easy to understand. There are fewer homes for sale and, because of that, home prices continue to rise. It’s simple supply and demand. When there are fewer homes for buyers to choose from, the ones that are available go for a higher price. But while that’s been the case for a while now, the most recent S&P Case-Shiller Indices – considered the leading measure of U.S. home prices – offers some encouraging news. The index found that, while prices are still climbing, they’re now increasing at a slower pace. Craig J. Lazzara, managing director at S&P, says, in many of the cities the index tracks, price increases have slowed. “We continue to see very strong growth at the city level,” Lazzara said. “As was the case last month, however, in 14 of 20 cities, prices decelerated – i.e., increased by less in October than they had done in September.” But while the rate of increases has slowed, prices are still rising at a double-digit pace. In fact, October’s gain was the fourth-highest reading in the 34 years S&P has been tracking price data. (source)

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New Home Sales Up 12.4% In November

New-home sales surged in November, rising 12.4 percent from the month before, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. The increase pushed sales to their highest level since April. Combined with the recently reported increase in existing-home sales, the improvement is further evidence that buyer demand remains high, even at a time of year when home sales typically slow due to winter weather, fewer listings, and the holidays. But while winter usually sees buyers putting their home search on hold until spring, this year, buyers remain active. One possible explanation is the expectation that mortgage rates will move higher next year. And while the expected rate increases should be modest, buyers may still be looking to lock in a low rate before they go any higher. Regionally, the report found the biggest improvement in the West, where sales rose 53.2 percent. The Northeast saw a 15.6 percent increase, while the South gained 2.6 percent. Only the Midwest saw a decline, with sales dropping 25.4 percent month over month. (source)