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Housing Market Sentiment Flat As Summer Nears

Fannie Mae’s Home Purchase Sentiment Index measures Americans’ perceptions of the housing market and their personal finances. Each month, participants are asked how they feel about buying and selling a home, mortgage rates, prices, the job market, and their income. In May, the index was relatively flat, increasing one point from the month before. There was a notable increase in the number of respondents who feel more secure in their jobs and money but the number who said they feel now is a good time to buy a house fell. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said market conditions are challenging buyers but haven’t yet curbed enthusiasm for home buying. “Despite the challenging buying conditions, consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment,” Duncan said. The results also show a 2 percent decline in the number of participants who believe home prices will rise over the next year. The number who think mortgage rates will fall increased 4 percent. (source)

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Money Is Motivating More Homeowners To Sell

The things that motivate homeowners to sell stay pretty consistent through the years. Mostly, they’re personal. Whether it’s because they need a bigger house to accommodate a growing family or they want to move into a smaller, more manageable home because the kids have moved out and they no longer need the space, life usually dictates when it’s time for a change. So, it’s no surprise that a recent survey of potential home sellers found the top reason they’re selling is that their home no longer meets the needs of their family. What is surprising is that the second most common answer was profit. The survey, conducted by the National Association of Realtors’ consumer website, found that 24 percent of respondents said they were planning to sell because they thought they could make a profit based on current market conditions. George Ratiu, the site’s senior economist, says Americans know they’re in a seller’s market. “Low mortgage rates and a lack of available homes for sale have created a strong seller’s market, and these survey results show that homeowners think that they have the upper hand if they list their home soon,” Raitu said. (source)

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What Day Of The Week Should You List Your Home?

Selling a house comes with a long to-do list. You’ve got to get the house ready for showings, clear out the clutter, and fix any lingering maintenance issues you’ve been neglecting. You also have to think about the price you’d like to get for it and where you’re moving to, when, and how. In other words, there’s a lot to do and think about. Which is why you may’ve never considered which day of the week is the best to list your home. But, according to one new analysis, it makes a difference. In fact, homes that are listed on a Thursday sell faster on average and are more likely to sell above list price compared to homes listed on other days of the week. Homes listed on a Sunday, for example, were found to stay on the market eight days longer than those listed on Thursdays. Homes listed on Saturdays or Mondays took seven days longer to sell. It makes sense, if you think about it. Thursdays are when home buyers are likely beginning to think about their weekend and whether or not there are any available homes they’d like to tour. Which makes it the optimal day for sellers to get their home in front of the most home shoppers. (source)

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Demand Falls Despite Favorable Mortgage Rates

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up and down last week. Rates fell week-over-week for 30-year fixed-rate loans with conforming loan balances and those backed by the Federal Housing Administration, but increased for 15-year fixed-rate mortgages and jumbo loans. Despite the movement, however, rates across all loan categories remain low by historical standards – even if they’re higher than the all-time lows seen in 2020. Last week’s rates didn’t boost demand, though. In fact, demand for loans to buy homes dropped 3 percent from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says there are a few factors holding buyers back. “Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020,” Kan said. “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity.” 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 Than Half Of Homes Sell Above List Price

In most cases, when you buy something, you don’t get to negotiate the price. If you’re buying a refrigerator, for example, you don’t make an offer. You pay whatever the store says it costs. Buying a house works a little bit differently. That’s because, the price a home lists for isn’t necessarily the price it sells for. Depending on market conditions, buyers may be able to get a house for less than its list price or, at other times, they may have to pay more. That’s particularly true in today’s market. A lower-than-normal number of homes for sale means buyers these days often have to compete with other buyers to get their offer chosen. Most often, that means paying more than the homeowner’s asking price. But how often should prospective buyers expect to have sweeten their offer to get the home they want? Well, according to one recent analysis, at the end of May, more than half the homes sold were sold above list price. In fact, 51 percent of homes sold for more than their list price, that’s up from just 26 percent last year at the same time. (source)

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Buyers Who Relocated Say They’re Happier Now

Last year, after the coronavirus’ onset, there was a lot of talk about how Americans were looking to move from city centers into the suburbs and exurbs. The pandemic had us staying at home more and more time in the house led to a wave of home buyers with a freshly updated wishlist. Space, privacy, and affordability led the list of features buyers were now focused on finding. In short, they wanted a bigger place with more outdoor space and a lower monthly cost. So how’d they do? Well, according to one recent survey, pretty well. In fact, 80 percent of those buyers said they’re happier now and had no regrets about their decision to move to a new area. Many of them also reported having more disposable income and lower housing costs than they did before they moved. And while about 15 percent said they had some regrets about their move, that’s remarkably low considering these buyers were making an important decision about their future during a chaotic time. Now the question is whether or not the trend will last as the pandemic’s impact begins to recede. (source)

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Contract Signings Are Near Pre-Pandemic Levels

When a buyer’s offer is accepted and a contract to buy is signed, that home’s sale is considered pending until the closing process has finished. Pending sales are considered a good indicator of future home sales, because there are typically weeks between the time when a contract is signed and the sale is finalized. That’s why the National Association of Realtors’ Pending Home Sales Index tracks them each month. In April, signings fell from the month before. Despite the month-over-month dip, however, Lawrence Yun, NAR’s chief economist, says contract signings are almost back to the level they were at before the coronavirus took hold. “Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes,” Yun said. “The upper-end market is still moving sharply as inventory is more plentiful there.” Yun expects the number of homes available for sale to improve as the year goes on. And as inventory improves, so should the number of home sales. (source)

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Demand For Loans To Buy Homes Increases

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes rose last week from the week before. In fact, the MBA’s Purchase Index increased 2 percent from one week earlier. It was the second improvement in three weeks. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says buyer demand remains high. “Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines,” Kan said. “Demand is robust throughout the country, but home buyers continue to be held back by the lack of homes for sale and rapidly increasing home prices.” The gains came during a week when average mortgage rates were relatively flat. There was little movement for 30-year fixed-rate loans with both conforming and jumbo balances. Loans backed by the Federal Housing Administration, on the other hand, saw an increase from the week before. 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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New Home Sales Retreat After Big Gains

Sales of newly built homes started this spring off strong. In March, they rose nearly 21 percent over where they were in February. But, as is often the case with new home sales, the spike was followed by a decline. In fact, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, sales fell 5.9 percent in April. So what’s behind the volatility? Well, for one, new home sales numbers are based on sales agreements or deposits taken, which can occur before a building permit is issued. In other words, the numbers are subject to revision because they include estimates. Which means, month-to-month data will see swings that typically level off as firmer numbers become available. For that reason, April’s decline is more likely indicative of a temporary setback than it is the start of a downward trend. Also in the April sales report, the median sales price of new homes sold during the month was $372,400. the average sales price was $435,400. (source)

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How Long Will You Live In Your Next House?

If you’re shopping for a house this year, there’s likely a reason you’ve decided now’s the right time for you to buy. Maybe it’s because you no longer like the neighborhood you’re in or you need more space because your family’s grown since your last move. Whatever the reason, the list of things you want in your next home is mostly tied to the things you want and need right now. But, based on a new analysis of homeownership tenure from ATTOM Data Solutions, you might want to also think about your future needs. That’s because, the length of time the average homeowner lives in a house has been growing in recent years. In fact, in the early 2000s, homeowners typically stayed in a house just under four-and-a-half years. These days, it’s almost double that. At the end of last year, for example, the average homeowner had owned their home over eight years. And while it’s fallen slightly this year, it’s still climbing in some places – especially, the Midwest and South. In other words, the house you buy today might be your home for most of the next decade. Which means, you should probably give some thought to – not just what you need right now – but also what you might need over the next several years. (source)