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Mortgage Rates Fall For Second Straight Week

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. Rates were down 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. The decline helped push demand for loan applications higher week over week. In fact, refinance activity moved up 7 percent and the purchase index was up 3 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says buyers returned to the market, but conditions remain challenging. “Purchase applications were also strong last week, increasing just under 3 percent and down only 4 percent from last year’s pace,” Kan said. “The dip in rates might have helped to bring some buyers back into the market, but housing inventory is still extremely low and price growth remains elevated.” Overall, mortgage application demand was up 5.5 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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Majority Of Recent Buyers Are Happy They Moved

Everyone, from time to time, dreams of moving somewhere new. Whether the dream is to move to a nicer house in the same area, out of state, or somewhere even more exotic, the dream is always exciting. Reality, however, is something different. Buying and selling a house, packing up all of your belongings, and moving is a lot of work and it can get stressful at times. But, if you’re someone who’s feeling overwhelmed at the prospect of an upcoming move, there’s reason to be optimistic. In fact, according to a new survey, there’s very little chance you won’t come out on the other end happy that you did it. The survey – which asked Americans who recently relocated how happy they are since their move – found that the vast majority of them said they feel happier. Among respondents, 54 percent said they were much happier, while 29 percent said they feel a little bit happier. That leaves just 17 percent who either felt no different or less happy – with only 3 percent saying they were much less happy than before their move. (source)

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Americans More Optimistic About Housing Market

For nearly a year and a half now, Fannie Mae’s Home Purchase Sentiment Index – which measures Americans’ perception of the housing market – has remained within the same general range. That’s not too surprising. After all, market conditions have been fairly consistent, following some initial volatility after the pandemic began in March 2020. Since then, a combination of low inventory and high buyer demand has been driving prices higher, while mortgage rates continue to hover just above all-time lows. That remains true today, which is why there’s been little movement in the HPSI in recent months. However, October’s results do show a slight improvement in the number of Americans who say they think now is a good time to buy or sell a home. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says consumers have some concerns about the economy but it isn’t likely to affect home buying activity. “While economic uncertainty could potentially dampen mortgage demand over the longer term, we believe current market conditions remain conducive to home purchase activity, as demand for homes continues to far outstrip the supply available for sale,” Duncan said. (source)

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Number Of Homes For Sale Declines As Winter Nears

Temperature isn’t the only thing that falls when the seasons change. If you follow the housing market, you know that the number of active buyers and available listings also begin to fall. It makes sense. The school year, the approaching holidays, and colder weather all have an effect on our willingness to buy or sell a home. And while this year’s market has been hotter than normal, that doesn’t mean we won’t see the same seasonal trends as we head into winter. According to one recent report, it may already be happening. In fact, the report shows that the number of homes for sale dropped in October across every price segment. But while that may be true, the price range you’re in will determine how many options you’ll find, if you’re house hunting this fall. For example, the number of available homes for sale under $200,000 has fallen 18.1 percent in the past year, while homes between $200,000 and $400,000 are down less than 1 percent. And as your price range rises, so do the number of listings. Year-over-year, homes between $400,000 and $600,000 are actually up, increasing 31.2 percent over the past 12 months. Similarly, homes between $600,000 and $1,000,000 rose 48.3 percent. (source)

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Typical Home Sale Generates $100,000 In Profit

Unless you’re a real-estate investor, your primary focus when buying or selling a home shouldn’t be profit. Your home, after all, is more than a mere investment. It’s where you spend your life. But while your motivation may not be money, new numbers from ATTOM Data Solutions show that it could be a nice side benefit. Their third-quarter 2021 U.S. Home Sales Report found that the typical home sold this summer generated a profit of $100,178. That’s up from $88,800 in the second quarter and $69,000 at the same time last year. In short, the market was hot. So hot, in fact, that median home prices rose year-over-year in 93 percent of metros with enough data to analyze. Todd Teta, ATTOM’s chief product officer, says the gains are nothing new. “The third quarter of this year marked another period in a banner year for a housing market boom that’s steaming ahead through its 10th year,” Teta said. “Prices and seller profits again hit new highs since the market started coming back from the Great Recession in 2012.” According to Teta, though there have been signs of a possible slowdown in recent months, housing market gains look poised to continue for the foreseeable future. (source)

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Mortgage Loan Demand Falls 3.3 Percent

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week for the first time since August. Rates were down 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. But despite declining rates, demand for mortgage loan applications fell 3.3 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said rates fell later in the week, which may explain why demand declined despite the drop. “Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed Treasury yields lower,” Kan said. “Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

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How Do Today’s Rates Compare To Years Past?

When you buy most things, you only have to consider their price. Buying a home is different. Whether or not a home is affordable depends on a number of factors beyond the list price. Mortgage rates, for example. The mortgage rate you lock in when you purchase your home helps determine how much your monthly payment will be. Which means, it’s important for home buyers to know where rates are and where they may be headed. In recent years, rates have been low. How low? Well, by historical standards, very low. According to Freddie Mac, rates in the 1970s ranged between 7 and 9 percent, before skyrocketing in the early 1980s, when they reached as high as 18 percent. And even though they calmed down in the 1990s and 2000s, they didn’t fall below 5 percent until 2009, following the financial crisis and housing crash. Since then, rates have remained low. In fact, rates over the past few years have been lower than they’ve been at any point in the past 40 years – which is great news for anyone looking to refinance their loan or purchase a home. (source)

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Fewer Buyers Look To Move Metros In 3rd Quarter

For a number of reasons, the coronavirus pandemic caused many Americans to rethink their living situation. Remote work and more time at home meant many of us began thinking about moving somewhere new, further from city centers where we could have more space for less money. But now, more than a year and a half later, the surging interest in moving metros looks like it’s starting to wane. In fact, according to newly released data, 30.2 percent of prospective buyers looked at homes in a new area during the third quarter. That’s down from 31.1 percent in the second quarter. It was the second-straight quarter interest in relocation dropped following a year’s worth of increases. But while it has begun to decline, it’s still higher than pre-pandemic numbers. And because flexible-work policies continue to give workers more options, it’s unlikely to fall back to where it was before the pandemic’s onset. So where are the most popular locations for buyers who are looking for a change? Well, the numbers show Miami, Phoenix, Sacramento, Las Vegas, and Tampa were the most popular areas for migrating Americans. (source)

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Contracts To Buy Down In September

Buying a house takes some time. Typically, there are several weeks between the time an offer is accepted and the deal is closed. That’s why contract signings are a closely watched measure of housing-market health. They’re a good indicator of future home sales and a gauge of how busy the market currently is. The National Association of Realtors tracks contract signings with their monthly Pending Home Sales Index. In September, it showed a 2.3 percent decrease from the month before, pushing it 8 percent lower than the same time last year. So what does this mean? Well, according to Lawrence Yun, NAR’s chief economist, it’s likely a sign that home buyers were becoming less active as the summer market wrapped up. “Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,’ Yun said. “Some potential buyers have momentarily paused their home search with intentions to resume in 2022.” Fewer active buyers could be good news, though, as it would help slow down price increases and reduce competition for home shoppers looking to buy before the end of the year. (source)

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Home Prices Still Rising But At A Slower Pace

The S&P Case-Shiller Home Price Indices is considered among the leading measures of U.S. home prices. Their data covers all nine census divisions and has been collected for nearly 30 years. According to their most recent release, home prices continue to increase but have begun to decelerate. In fact, both the 10-city and 20-city composite indexes showed a slower rate of increase in August than they did the month before. Still, S&P’s managing director and global head of index investment strategy, Craig Lazzara, says price growth remains strong. “The U.S. housing market showed continuing strength in August 2021,” Lazarra said. “Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.” The national index shows prices up nearly 20 percent from one year ago. Among individual cities, Phoenix experienced the biggest gains, with San Diego, Tampa Bay, Dallas, and Seattle rounding out the top five cities with the biggest increases. (source)