The National Association of Realtors’ Pending Home Sales Index measures the number of contracts to buy homes that are signed each month. Because contract signings precede closings by several weeks, the index can be a good predictor of future home sales numbers. In February, the NAR found pending home sales down 10.6 percent from the month before but virtually unchanged from where they were one year earlier. Lawrence Yun, NAR’s chief economist, says the month-over-month decline is mostly due to the fact that there are too few homes for sale. “The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift but contracts are not clicking due to record-low inventory,” Yun said. “Potential buyers may have to enlarge their geographic search areas, given the current tight market.” Fortunately, Yun says recent mortgage-rate increases don’t appear to have affected prospective home buyers. And, with the spring market just beginning, homes for sale should start to pick up, which will help bring balance to the market and slow price increases. (source)
Archive for April 2021
Mortgage Rate Decline Is First In Seven Weeks
According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. 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 decline was the first after seven consecutive weeks of increases. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said rates are still higher than they were at the start of the year and buyers are noticing. “Many prospective home buyers this spring are feeling the effects of higher rates and rapidly accelerating home prices,” Kan said. “Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10 percent growth rates seen in 2005. The housing market is in desperate need of more inventory to cool price growth and preserve affordability.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
