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Demand For Home Purchase Loans Spikes

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes started the month off strong. In fact, the MBA’s Purchase Index for the week ending September 10 saw an 8 percent increase from one week earlier. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said the gain pushed purchase application demand higher than it’s been in months. “Purchase applications – after adjusting for the impact of Labor Day – increased over 7 percent last week to their highest level since April 2021,’ Kan said. “Compared to the same week last September, which was right in the middle of a significant upswing in home purchases, applications were down 11 percent – the smallest year-over-year decline in 14 weeks.” The improvement came during a week when average mortgage rates were relatively flat, with slight decreases seen for jumbo loans, loans backed by the FHA, and 15-year fixed-rate loans. 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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Flexible Work Fuels A Desire To Move

Work has always played a role in where we live. After all, nobody likes a long commute. Which is why we’ve typically looked to live somewhere close to where we worked. But the pandemic changed work routines for many people and now it looks like it’ll be changing how we decide where we want to move. It’s already fueling a desire to make a change. In fact, according to one recent analysis, the number of remote or hybrid workers who say they’re ready to move is about 10 percent higher than the number of in-person workers who say the same. But before workers can look for a bigger, more affordable place somewhere new, they’ll have to know exactly what their future work schedule will look like. And many of them don’t. The same analysis found that nearly 40 percent of employees still don’t know if, or how often, they’ll have to return to their workplace. When they find out, though, it’ll likely lead to a significant shift in where home shoppers are looking to buy. (source)

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Early Fall May Be The Best Time To Buy

The best time to buy a house is when you’re ready. But, once you’re ready, picking the right time of year to start the process could be beneficial. It could even save you money. How? Well, when the market slows down and there are fewer active home buyers, price increases, bidding wars, and competition also slow down. That means, buying at the right time of year may mean better deals and less stress. And, according to a recent analysis from the National Association of Realtors’ consumer website, the right time of year may be right now. “Home prices peaked in the summer, and new listings continue to come on the market helping slow the pace of sales – which is good news for homebuyers,” Danielle Hale, the site’s chief economist, said. “As families across the county focus on getting back into school routines, there are fewer buyers in the market, creating a great opportunity especially for first-time home buyers to make a purchase with somewhat less competition.” The analysis found that, between September 12 and October 17, buyers could see prices $10,000 below their seasonal high. (source)

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Mortgage Credit Availability Improves In August

If you want to be approved for a mortgage, you have to qualify. Which means, if you have too much debt, too little income, or bad credit, you may not be able to get a loan. Put simply, you have to have your finances in order, if you hope to borrow hundreds of thousands of dollars. But the standards lenders use to determine whether or not you’re qualified aren’t fixed. Sometimes they’re more lenient than others. That’s why the Mortgage Bankers Association tracks mortgage credit availability. Their monthly index determines whether access to credit is loosening or tightening. Any increase means potential borrowers will have an easier time getting approved for a mortgage, while a decline means standards have gotten stricter. In August, the index increased 3.9 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says availability increased across the board. “Credit availability increased in August, driven by significant activity across all indexes,” Kan said. “Of note, jumbo credit availability increased 9 percent to its highest level since March 2020.” Conforming credit availability was up 5.1 percent. (source)

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Homeowners See Big 2nd Quarter Equity Gains

Equity is the difference between what you owe on your house and what it’s worth. So, when home prices are growing, equity is too. And with the recent spike in home prices, equity has surged. In fact, according to Black Knight’s most recent Mortgage Monitor Report, tappable equity – the amount available for homeowners to borrow against while still retaining at least 20 percent equity in their homes – grew 37 percent over year-before levels during the second quarter of this year. Ben Graboske, Black Knight’s president, says homeowners have made big gains. “This is by far the strongest growth we’ve ever seen and equates to some $173,000 in equity available to the average mortgage holder, a $20,000 increase in just three months,” Graboske said. According to the report, tappable equity hit a record high at the end of the first quarter, reaching $8.1 trillion. During the second quarter, it added an additional $1 trillion to that total. (source)

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Mortgage Rates Hover Just Above Lows

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, hovering just above last year’s historic lows. There was little movement seen for 30-year fixed-rate loans with conforming loan balances, loans backed by the FHA, and 15-year fixed-rate loans. Rates for jumbo loans saw a slight increase. Mike Fratantoni, MBA’s senior vice president and chief economist, says rates remain low but could see upward pressure by the end of the year. “Economic data has sent mixed signals, with slower job growth but a further drop in the unemployment rate in August,” Fratantoni said. “We expect that further improvements will lead to a tapering of Fed MBS purchases by the end of the year, which should put some upward pressure on mortgage rates.” 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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More Americans Say It’s A Good Time To Buy

Fannie Mae’s Home Purchase Sentiment Index is based on a monthly survey gauging Americans’ feelings about the housing market and overall economy. It asks respondents for their opinions about buying and selling a home, mortgage rates, home prices, their jobs and financial situation. In August, the index was largely unchanged from the month before. However, the share of participants who said they felt it was a good time to buy a home was up 7 percent. It was the first increase in buying optimism since March. Mark Palim, Fannie Mae’s vice president and deputy chief economist, says buyers expect conditions to improve in the months ahead. “The ‘good time to buy’ component, while still near a survey low, did tick up for the first time since March, perhaps owing in part to the favorable mortgage rate environment and growing expectations that home price growth will begin to moderate over the next twelve months,” Palim said. Overall, 32 percent of respondents said they thought it was a good time to buy, while 73 percent said it was a good time to sell. (source)

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How Building Material Costs Affect Home Buyers

The typical home buyer doesn’t spend much time considering the price of gypsum products or ready-mix concrete. But the prices builders pay for building materials has an effect on buyers – even if they aren’t shopping for a new home. That’s because new home construction is the fastest way to boost inventory. And, when there are more homes for sale, home prices moderate. So, when more new homes are being built, it benefits all buyers because it helps keep prices in check. That’s part of the reason prices have been rising so rapidly over the past year. Building material costs have been increasing at a fast pace. In fact, according to new numbers from the National Association of Home Builders, material costs have increased almost 20 percent over the past 12 months. That’s made it more difficult for home builders to build the affordable homes needed to bring balance to the market and more choices to buyers. (source)

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Home Prices Increase Almost Everywhere

There are many gauges of U.S. home prices but the S&P Case-Shiller Indices is among the most closely followed. The index is constructed to accurately track the price path of a typical single-family home in each of the nine U.S. Census divisions. According to the most recent release, home prices are still increasing and the gains can be seen almost everywhere. In fact, Craig J. Lazzara, managing director and global head of index investment strategy at S&P, says prices have hit all-time highs everywhere but Chicago. “The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” Lazzara said. “Home prices in 19 of our 20 cities (all but Chicago) now stand at all-time highs, as do the National Composite and both the 10-and 20-City indices.” Fortunately for home buyers, the number of homes for sale has begun to improve and should help slow the rate of price increases in coming months. (source)

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Demand for Home Purchase Loans Increases

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes rose last week to its highest level since early July. Though slight, the 1 percent increase shows home buyers remain active as the summer market winds down. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the high end of the market is still dominate. “Home purchase activity continues to be dominated by higher price tiers of the market, with the purchase average loan size now at $396,000, the highest average in five weeks,” Kan said. But while demand for loans to buy homes improved week-over-week, refinance activity was down 4 percent. Mortgage rates, on the other hand, saw little change from the week before. The MBA’s survey has been conducted weekly since 1990 and covers 75 percent of all retail residential mortgage applications. (source)