Rate Drop Spurs Mortgage Application Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey – which covers more than 75 percent of all retail residential mortgages – average mortgage rates fell last week across all loan categories and are at their lowest level since last November. Rates fell significantly for 30-year fixed-rate mortgages with conforming loan balances, but were also down for loans backed by the Federal Housing Administration and 15-year fixed-rate loans. Joel Kan, an MBA economist, told CNBC rates dropped largely because of concern over international events. “Heightened geopolitical tensions last week brought mortgage rates to their lowest level since the 2016 election,” Kan said. “Refinance volume jumped as a result, and for the first time since January, the majority of application volume was for refinances, with the refinance share almost 51 percent.” Still, demand for loans to buy homes rose as well last week and is now 5 percent higher than at the same time last year. The week’s results were also affected by Hurricane Harvey, which disrupted bank activity and led to double-digit declines in Texas. More here.

What Will The Housing Market Look Like This Fall?

It can be hard to get a grasp on what is happening in the housing market with the constant news updates about home sales, mortgage rates, and prices. Monthly housing reports can be volatile and can give a skewed view of where things are. They can also confuse and discourage potential home buyers. But you shouldn’t get down on yourself if you feel like you aren’t sure if now’s a good time to buy or sell a house. Instead, take a long view of the market to help put things in perspective. For example, recent research from Freddie Mac shows that sales of previously owned homes are up 2.1 percent so far this year and on pace for their best year since 2007. Mortgage rates are still historically low and expected to stay that way through the end of the year. And home prices continue to push upward – mostly due to the fact that, in many markets, there are fewer homes for sale than is typical. All in all, this means, heading into fall, the housing market will likely continue to see higher home prices being balanced by low mortgage rates. But, though affordability conditions may not change dramatically one way or the other, there will still be fewer homes for buyers to choose from – which means you’ll want to be ready to move quickly this fall, even if the market is less competitive than it was during the summer. More here.

Contract Signings Hold Steady In July

The number of contracts to buy homes signed during any given month can be used to get an idea of what home sales are going to look like in coming months. That’s why the National Association of Realtors tracks pending home sales. Because pending sales measure signings, not closings, they can be a good indicator of future existing home sales. In July, the NAR’s Pending Home Sales Index fell 0.8 percent, marking the third decline in four months. Lawrence Yun, NAR’s chief economist, says buyer traffic continues to be higher than the supply of homes for sale. “Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April, and inventory at the end of July was 9 percent lower than last July,” Yun said. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves.” But, despite the challenges, the NAR still expects sales to surpass last year’s levels, if only slightly. Also in the report, the national median existing-home price is expected to be up 5 percent this year, which is about the same amount prices rose the year before. More here.

First Time Home Buyers Are Eager To Buy

New data shows first-time home buyers bought more single-family homes during the second quarter of this year than they have since 1999. That’s significant, since first-time buyers are an important demographic for the overall health of the housing market. Typically, young Americans account for around 40 percent of all home sales. For the past several years, though, they’ve been less active. However, according to new numbers from Genworth Mortgage Insurance, they accounted for 36 percent of all homes sold during the second quarter of this year, which is an improvement over last year. Tian Liu, Genworth’s chief economist, says the number of interested first-time buyers is growing. “As the housing market matures, first-time home buyers are becoming an even more important source of growth,” Liu says. “Whether one looks at the three million missing first-time home buyers since 2007 or the historically low homeownership rate among young households, the potential growth opportunity remains large and will likely take years to play out.” In short, there is pent-up demand among young Americans hoping to become homeowners. How and when they decide to enter the market will determine what the real estate market looks like for the next few years. More here.

Mortgage Rates Hold At Low Point For The Year

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with little change seen for 30-year fixed rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. However, because rates were unchanged from the previous week, that means they remain at their lowest point since last November. That’s good news for home buyers hoping to purchase a home before the end of the summer and also homeowners who may be hoping to refinance. So why hasn’t mortgage application demand gone up as rates have hovered at 9-month lows? Well, according to Joel Kan, an MBA economist, it’s because they haven’t fallen low enough for consumers who have grown accustomed to the historically low rates of the past few years. “Mortgage rates generally fell, but not as low as they had in 2016,” Kan told CNBC. “Borrowers potentially looking at a refinance might be waiting for a much bigger decrease in order to act.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

One Quarter Of Homeowners Are Equity Rich

Equity can be loosely defined as the value of your house minus how much you owe on the mortgage. Which means, as you make your monthly mortgage payments, you’re gaining a larger share of your home’s value. In addition, if your home’s price goes up, so does your equity. Ultimately, the more you have, the better. That’s why the numbers from ATTOM Data Solutions’ Q2 2017 U.S. Home Equity & Underwater Report are good news for homeowners. The report shows more than 14 million U.S. properties were equity rich, meaning their remaining mortgage amount was 50 percent or less than the estimated value of their house. That’s 320,000 more than the previous quarter and nearly 25 percent of all U.S. properties with a mortgage. Daren Blomquist, senior vice president at ATTOM, says there are a couple of reasons behind the improvement. “An increasing number of U.S. homeowners are amassing impressive stockpiles of home equity wealth, enjoying the benefits of rapidly rising home prices while staying conservative when it comes to cashing out on their equity – homeowners are staying in their homes nearly twice as long before selling as they were prior to the Great Recession, and the volume of home equity lines of credit are running about one-third of the level they were at during the last housing boom,” Blomquist says. More here.

Are More Homes About To Be Listed For Sale?

The number one issue for home buyers and sellers so far this year has been inventory. A lower-than-normal number of homes for sale has pushed prices higher and caused more competition for buyers in many markets. And, though higher prices can be good for homeowners who are looking to sell, they too will need to find a house to buy and move into once theirs has sold. In other words, inventory is an issue for anyone who is buying or selling a house right now. So when can we expect more homes to hit the market? Well, according to a report from the National Association of Realtors, fairly soon. In fact, their prediction is that August will show up to 500,000 new listings, which would represent the largest yearly gain in new inventory since March 2016. But, though this is encouraging news, they also expect that the majority of these new listings will be higher priced homes. If true, that will provide relief to some buyers but may not help first-time home buyers who are looking for an affordable starter home. Still, any increase in the number of homes for sale is good news for the overall market, since it can help moderate price increases and offer more choices to home shoppers. More here.

New Home Sales Up 9% Over Last Year

Sales of newly built single-family homes are now 9.2 percent above last year’s level, according to new numbers from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This year-over-year improvement is important, especially since month-over-month results showed a 9.4 percent decline. In short, monthly housing data can be volatile but, if you focus on long-term results, it often reveals a much different picture. That’s why, despite a drop in July, Michael Neal, senior economist with the National Association of Home Builders, says sales should continue to improve. “The year-to-date growth shows that new home sales continue to trend upward at a steady pace over the longer term,” Neal said. “Steady economic growth and a healthier labor market suggest that the underlying economic fundamentals remain in place for a continued recovery.” New home sales are an important barometer because new home construction helps balance the market and moderate price increases. Also in the report, the median sales price of new houses sold in July was $313,700. The average sales price was $371,200. More here.

Typical Home Sells In Less Than A Month

In July, 51 percent of homes were on the market less than a month before selling, according to new numbers from the National Association of Realtors. The data provides more evidence that, even as the summer season wears down, there is still a high level of buyer demand in most markets. Lawrence Yun, NAR’s chief economist, says it was the fourth month in a row homes sold in 30 days or less. “July was the fourth consecutive month that the typical listing went under contract in under one month,” Yun said. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest.” According to Yun, a lack of new home construction is keeping inventory levels low and competition high. That means, home buyers should be prepared to act fast if they find a home they like. Overall, the number of existing homes that sold in July was 1.3 percent fewer than the previous month but still 2.1 percent higher than last year. Regionally, sales were up in the South and West, but fell in the Northeast and Midwest. More here.

Mortgage Report Highlights Market Disparity

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, remaining at their lowest level in months. However, despite favorable rates, demand for loans to buy homes hasn’t moved much. In fact, last week purchase application demand was down 2 percent from the week before, though it remains 9 percent higher than at the same time last year. So why aren’t buyers more enthusiastic about low rates? Well, one reason is inventory. There is more demand for affordable, entry-level homes but fewer homes for sale in that price range. Which means, though buyers are interested, they may be having trouble finding a suitable house to buy. Sales on the high-end of the market, however, are doing fine. Joel Kan, an MBA economist, says demand for jumbo loans is high. “A strong appetite for jumbo loans and a highly competitive jumbo market has led to increased availability and lower pricing of jumbo loans over the past few years,” Kan told CNBC. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.