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Gap Widens Between Buying And Selling Sentiment

In April, Fannie Mae’s Home Purchase Sentiment Index found a widening gap between the number of respondents who say it’s a good time to sell a home and those who say it’s a good time to buy one. The index – which is based on a survey that asks Americans for their opinions on the housing market and economy – shows the share of participants who say it’s a good time to buy fell from 53 percent to 47 percent month-over-month. Conversely, the share who said it’s a good time to sell rose from 61 percent to 67 percent. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says there are plenty of Americans who want to buy a home but conditions have made it challenging. “The decrease in home buying sentiment likely indicates that some consumers, potentially flush with savings – perhaps boosted in part by stimulus payments – may be attempting, but failing to buy a home due to heightened competition for relatively few listed homes,” Duncan said. In other words, the growing gap between home-buying and home-selling sentiment isn’t due to a lack of buyer interest. Low inventory has been holding buyers back. But as more homes are listed for sale, the now widening gap between buying and selling sentiment should begin narrow. (source)

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Mortgage Report Says Metrics Look Strong

While the housing market outperformed expectations last year, it wasn’t untouched by the economic impact of the pandemic. There were scores of American homeowners who were suddenly without work or a way to cover their mortgage payment. Which is why the most recent Mortgage Monitor from Black Knight Financial is an encouraging sign. The report – which looks at loan-level residential mortgage data – found that, in April, the number of Americans paying their mortgage on time rose to the highest level since the pandemic began. In fact, 91.6 percent of mortgage holders made their monthly payments, up from 91 percent in March. Ben Graboske, Black Knight’s president, said that wasn’t the only metric pointing toward a strong recovery. “Despite mortgage delinquencies tending to trend seasonally upward starting in April, our McDash Flash daily performance dataset instead shows strong early payment activity for the month, ” Graboske said. That’s also good news – as is the fact that the number of borrowers with at least one payment past due is now down 34 percent since February. (source)

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Loan Demand Falls While Rates Remain Flat

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with slight increases for loans backed by the Federal Housing Administration and 30-year fixed-rate loans with both conforming and jumbo balances. But despite flat rates, demand for loans to buy homes was down for the second week in a row. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says home buying demand is being held back by low inventory and higher prices. “Both conventional and government purchase applications declined, but average loan sizes increased for each loan type,” Kan explained. “This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity.” Still, overall demand for mortgage loans was down just 0.9 percent from the week before and purchase demand remains 24 percent higher than last year at this time. 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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Month Of May Is Best For Seller Premiums

Everybody with a home to sell wants to get as much as they can for it. But beyond sprucing it up and making sure it looks its best, what else can you do to be certain you get a good offer? Well, according to a new analysis from ATTOM Data Solutions, you can also choose the right day to sell. ATTOM looked at 40.1 million home sales between 2011 and 2020 to determine which days of the year brought sellers the biggest premiums. The results show the month of May gives homeowners their best shot to sell their home above its estimated market value. Todd Teta, ATTOM’s chief product officer, says May – which had 10 of the best days to sell – also had the single best day based on premiums. “The month of May is particularly poised to garner the greatest sale premiums,” Teta said. “Among the top five days fetching the biggest home seller premiums, May 23 is the best day of the year to sell a home, producing a premium of 19.3 percent above market value.” Overall, May sales were found to be 13.4 percent above estimated values. However, if you have to wait until June, don’t despair. Premiums are still nearly 12 percent as the spring market rolls into summer. (source)

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New Home Share Of Homes Sold Sets A Record

New home sales peaked at the height of the housing boom in 2005. But following those all-time highs, sales plummeted and the subsequent recovery took more than a decade. In fact, annual sales still haven’t reached the highs of 15 years ago – though they’ve largely made up the lost ground. In one way, however, new home sales are doing better than ever. According to an analysis of recent sales, 25.7 percent of homes sold during the first quarter of 2021 were newly constructed homes. That’s up from 20.4 percent last year at the same time. It’s also the highest share of total home sales on record. So what’s behind the increase? Well, for one, there are fewer existing homes available for sale. Many Americans have recently refinanced or remodeled their homes and are staying put. That means, new construction is filling in where existing inventory is lacking. The other reason is buyer demand. With low mortgage rates boosting the number of buyers, home builders have incentive to build more, and they are. This combination of low mortgage rates, high buyer demand, and fewer existing homes, has fueled a boom in the new-home market, which will likely stay hot for the foreseeable future. (source)

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Home Price Increases Show Market’s Strength

The S&P Case-Shiller Home Price Indices are considered a leading measure of U.S. home prices. According to their most recent release, home values continue to show strength. In fact, the index found prices were up over the month before in all 20 included cities and are now rising faster than at any point since 2006. Craig J. Lazzara, managing director and global head of index investment strategy at S&P, says recent increases are among the highest they’ve recorded in more than 30 years of collecting price data. “More than 30 years of S&P Case-Shiller data help us to put February’s results into historical context,” Lazzara said. “The National Composite’s 12 percent gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance. Housing’s strength is reflected across all 20 cities.” Price increases are good news for homeowners thinking about selling a home this year, as low inventory means more competition for available homes. (source)

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Contract Signings Bounce Back After Declines

The number of contracts to buy homes rebounded in March, according to new numbers from the National Association of Realtors. Their Pending Home Sales Index – which measures signings, not closings – saw a 1.9 percent increase from the month before. It was the first improvement following two consecutive months of declines. Lawrence Yun, NAR’s chief economist, says demand from buyers is high and will likely remain high. “The increase in pending sales transactions for the month of March is indicative of high housing demand,” Yun said. “With mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high.” Yun also believes the low supply of homes for sale will begin to recover in the coming months as more new homes are built. “Although these moves won’t immediately replenish low supply, they will be a step forward,” he said. Regionally, the South, West, and Northeast all saw month-over-month gains. The Midwest was the only region that slowed from the previous month. (source)

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Mortgage Rates Continue To Fall

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell again last week. 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 drop marks the third consecutive week rates have fallen. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says declining rates didn’t keep demand for mortgage applications from decreasing. “Mortgage applications decreased last week, even as mortgage rates dropped for the third week in a row,” Kan said. “The purchase market’s recent slide comes despite a strengthening economy and labor market. Activity is still above year-ago levels, but accelerating home-price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.” Last week, demand for loans to buy homes was down 5 percent from one week earlier. It was 34 percent higher than the same week one year ago. (source)

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Urban Neighborhoods Gaining Buyer Interest

Many home buyers used the coronavirus as an excuse to get away from it all. After the pandemic’s initial onset, interest in small towns and rural areas spiked, as more Americans looked to move somewhere where they could have more space for the same money. The increased interest in suburbs and exurbs pushed price growth in those areas and soon their prices were outpacing urban neighborhoods. But while the trend continued through the end of 2020, the beginning of this year brought a change. Home buyers were, once again, looking to buy in bigger cities. Now, according to one recent analysis, urban single-family homes are showing price increases of almost 20 percent year-over-year. They’re also getting more pageviews online. And, in both cases, they’re outpacing properties in the small towns and rural areas that boomed last year at this time. The newfound interest in urban neighborhoods seems to stem from increasing optimism about the coronavirus vaccines and rebounding economy. But while buyers are looking at properties in the city, they haven’t let go of their need for more space. In fact, single-family homes have been selling faster than condos – not just in cities, but in neighborhoods of all types. (source)

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Housing Market Still Faces Some Pandemic Risk

The coronavirus couldn’t stop a hot market in 2020. After a brief pause, home buyers returned and sales bounced back. But while the housing market was an economic bright spot last year – and vaccinations provide hope that the pandemic’s worst days are behind us – there’s still some risk. That’s why ATTOM Data Solutions’ first-quarter 2021 Special Coronavirus Report looked at which markets were most vulnerable among 552 counties across the country. The report analyzed each county – specifically looking at the percentage of homes facing possible foreclosure, the portion with mortgage balances exceeding the estimated property value, and the percentage of average wages required to pay for homeownership expenses. Todd Teta, ATTOM’s chief product officer says there were some areas that showed more vulnerability than others. “Clearly the housing market continues to surge, and things are looking up, more and more, for the U.S. economy in 2021 …” Teta said. “Our analysis suggests that even as the market remains hot, pockets of the East Coast, Midwest, and South are at higher risk from potential damage connected to the pandemic.” The counties seen as vulnerable included areas in New Jersey, Illinois, Connecticut, North Carolina, and Florida. (source)