By now, anyone interested in buying a house knows home prices have been rising. Climbing prices have been a factor for home buyers for years, and especially over the past 12 months. But while home prices have risen, that doesn’t necessarily mean you can’t find a home that’s affordable. It might actually be more possible than you think. For example, according to the National Association of Home Builders’ most recent Housing Opportunity Index – which measures how affordable buying a home is for families earning the U.S. median income – 56.6 percent of homes sold between the beginning of July and the end of September were considered affordable. That’s the good news. The bad news is affordability is at a lower level than it’s been in recent years. And, according to NAHB chairman, Chuck Fowke, the challenges home builders are facing have made it difficult to build the new homes that could help provide more affordable options for buyers. “Persistent building material supply chain bottlenecks and tariffs on Canadian lumber and Chinese steel and aluminum continue to place upward pressure on construction costs and home prices,” Fowke said. “Policymakers must fix supply chain vulnerabilities that are disrupting and delaying construction projects and hurting housing affordability.” (source)
Archive for November 2021
Homeownership Benefits Buyers’ Bottom Line
New numbers from ATTOM Data Solutions show that 39.5 percent of mortgaged residential properties were considered equity rich during the third quarter. That’s up from 28.3 percent last year at the same time. So what does equity rich mean? Well, according to ATTOM’s U.S. Home Equity & Underwater Report, it means the amount of loan balances secured by those properties was no more than 50 percent of the home’s estimated market value. In other words, a large percentage of homeowners are seeing a big benefit to their bottom line as their home’s value continues to grow. But it isn’t just long-time homeowners who are benefiting. With national home values up 16 percent year over year, even recent buyers have begun to see gains. Todd Teta, ATTOM’s chief product officer, says the improvements have been the best in years. “Homeowners across most of the United States could sit back with a smile yet again in the third quarter and watch their balance sheets grow as soaring home prices pushed their equity levels even higher,” Teta said. “Amid the best gains in two years, nearly four of every 10 owners found themselves in equity-rich territory.” (source)
Mortgage Rates Fall For Second Straight Week
According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from the week before. 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 helped push demand for loan applications higher week over week. In fact, refinance activity moved up 7 percent and the purchase index was up 3 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says buyers returned to the market, but conditions remain challenging. “Purchase applications were also strong last week, increasing just under 3 percent and down only 4 percent from last year’s pace,” Kan said. “The dip in rates might have helped to bring some buyers back into the market, but housing inventory is still extremely low and price growth remains elevated.” Overall, mortgage application demand was up 5.5 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
Majority Of Recent Buyers Are Happy They Moved
Everyone, from time to time, dreams of moving somewhere new. Whether the dream is to move to a nicer house in the same area, out of state, or somewhere even more exotic, the dream is always exciting. Reality, however, is something different. Buying and selling a house, packing up all of your belongings, and moving is a lot of work and it can get stressful at times. But, if you’re someone who’s feeling overwhelmed at the prospect of an upcoming move, there’s reason to be optimistic. In fact, according to a new survey, there’s very little chance you won’t come out on the other end happy that you did it. The survey – which asked Americans who recently relocated how happy they are since their move – found that the vast majority of them said they feel happier. Among respondents, 54 percent said they were much happier, while 29 percent said they feel a little bit happier. That leaves just 17 percent who either felt no different or less happy – with only 3 percent saying they were much less happy than before their move. (source)
Americans More Optimistic About Housing Market
For nearly a year and a half now, Fannie Mae’s Home Purchase Sentiment Index – which measures Americans’ perception of the housing market – has remained within the same general range. That’s not too surprising. After all, market conditions have been fairly consistent, following some initial volatility after the pandemic began in March 2020. Since then, a combination of low inventory and high buyer demand has been driving prices higher, while mortgage rates continue to hover just above all-time lows. That remains true today, which is why there’s been little movement in the HPSI in recent months. However, October’s results do show a slight improvement in the number of Americans who say they think now is a good time to buy or sell a home. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says consumers have some concerns about the economy but it isn’t likely to affect home buying activity. “While economic uncertainty could potentially dampen mortgage demand over the longer term, we believe current market conditions remain conducive to home purchase activity, as demand for homes continues to far outstrip the supply available for sale,” Duncan said. (source)
Number Of Homes For Sale Declines As Winter Nears
Temperature isn’t the only thing that falls when the seasons change. If you follow the housing market, you know that the number of active buyers and available listings also begin to fall. It makes sense. The school year, the approaching holidays, and colder weather all have an effect on our willingness to buy or sell a home. And while this year’s market has been hotter than normal, that doesn’t mean we won’t see the same seasonal trends as we head into winter. According to one recent report, it may already be happening. In fact, the report shows that the number of homes for sale dropped in October across every price segment. But while that may be true, the price range you’re in will determine how many options you’ll find, if you’re house hunting this fall. For example, the number of available homes for sale under $200,000 has fallen 18.1 percent in the past year, while homes between $200,000 and $400,000 are down less than 1 percent. And as your price range rises, so do the number of listings. Year-over-year, homes between $400,000 and $600,000 are actually up, increasing 31.2 percent over the past 12 months. Similarly, homes between $600,000 and $1,000,000 rose 48.3 percent. (source)
