According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with rates seeing little change for 30-year fixed-rate loans with both conforming and jumbo balances. Rates were also flat for 15-year fixed-rate loans, though they fell for mortgages backed by the Federal Housing Administration. Overall, rates are hovering just above historic lows and it’s helped boost mortgage demand. In fact, refinance activity is up 146 percent from last year and demand for loans to buy homes is up 5 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says favorable conditions should lead to more improvement in the coming months. “The November jobs data showed increased payroll gains and low unemployment, which means conditions remain favorable for steady purchase growth in the coming months,” Kan said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
Archive for December 2019
Are New Homes Getting Smaller?
Over the years, American homes have grown larger. In fact, the typical new home is about 1,000 square feet bigger than it was in 1980. But is the decades-long trend toward bigger homes coming to an end? Well, according to recent data, it may already have. That’s because, though the median size of a new single-family home built in 2018 was 2,386 square feet – which is, by no means, a small home – that number has been declining over the past few years. Part of the reason for the decline is growing demand for affordable homes. With the number of homes for sale lower than normal, new home builders are increasingly addressing buyers’ needs by building smaller, more affordable homes. The other factor is generational. Millennials have reached the age of the average first-time home buyer and, naturally, have different preferences than their parents. Spacious homes far from the city aren’t as popular with younger buyers, who prefer a smaller, more manageable home closer to work and amenities. Because of this, the trend toward smaller homes will likely continue in 2020 and beyond. More here.
Americans Say It’s A Good Time To Buy
Each month, Fannie Mae conducts a survey asking respondents for their perception of the housing market, buying and selling a home, mortgage rates, their job, home prices, etc. Their Home Purchase Sentiment Index is meant to gauge Americans’ interest in buying a home. In November, the Index improved, with a significant increase in the number of participants who said they thought now was a good time to buy a house. In fact, the percentage of Americans who think it’s a good time to buy rose to 61 percent from 57 percent the previous month. That’s the highest it’s been since March 2018. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says low mortgage rates have helped prospective home buyers, but inventory remains an obstacle. “Over the past year, a growing share of consumers say that they expect mortgage rates to remain steady,” Duncan said. “While low rates have helped boost housing affordability compared to last year, the HPSI has increased only moderately in that timeframe. This may be due in part to the ongoing challenge of tight housing supply, especially in the starter home market.” More here.
Speciality Rooms Are Popular With Younger Buyers
There are some rooms you’ll find in every house. Kitchens, bathrooms, and bedrooms come to mind. Libraries, on the other hand, aren’t as common. In short, some rooms are more essential than others. But these days, the list of essential spaces is expanding. And, according to a new survey from the National Association of Home Builders, buyers – and especially younger buyers – have strong feelings about which types of rooms they want in their next house. Among millennials home buyers, laundry rooms lead the list. In fact, 86 percent of millennial respondents said having a laundry room was either desirable or a must have. Other speciality rooms that were popular with large majorities of millennials included dining rooms, home offices, and great rooms. But naturally, millennials aren’t the only buyers who have a preference for speciality spaces. After all, older buyers likely also prefer to have a laundry room in the house. However, there are some generational differences in which rooms were deemed most important to which buyers. For example, the survey found younger buyers were much more likely than other generations to say their next house needed to have an exercise, media, or game room. More here.
Will Next Year Be Good For Home Buyers?
Home buyers have a lot to consider. They have to think about the size and location of the house they’ll buy, how much storage it’ll have, the school district, how many bathrooms, the kitchen, mechanical systems, the roof, the neighborhood, etc. It’s a lot. But, if that weren’t enough, it’s also important to consider market conditions and what the financial side of buying looks like. So what can buyers expect to find when shopping for a house in 2020? Well, according to a new forecast from the National Association of Realtors’ consumer website, there’s good news and bad. More new homes, low mortgage rates, and slower price appreciation are all encouraging signs for hopeful home buyers. Add to that easier access to credit and it sounds like a good time to buy. However, challenges will remain. For example, low inventory remains a big issue for the housing market and, in areas where there are more buyers than homes for sale, it may take longer to find a home. This is especially true for first-time buyers. New home construction has largely been limited to higher-end homes, which means affordable homes in entry-level price ranges may be harder to come by. More here.
