According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up 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 increases didn’t slow mortgage application demand, though. In fact, demand for loans was up 6.6 percent from the week before, with applications for loans to buy homes up 8 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says rates increased due to economic uncertainty. “Mortgage rates followed Treasury yields up in response to higher-than-expected inflation and anticipation that the Federal Reserve will need to raise rates at a faster pace,” Kan said. “Despite the increase in rates, application activity rebounded following the Memorial Day holiday week but remained 0.29 percent below pre-holiday levels.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The standards lenders use to determine whether or not a borrower is approved for a mortgage aren’t fixed. There are times when it’s easier to qualify and times when it’s more difficult. Because of this, the Mortgage Bankers Association tracks whether lending standards are loosening or tightening. Their monthly Mortgage Credit Availability Index measures how easy it is for borrowers to get a mortgage based on several factors, including credit scores, loan types, and loan-to-value ratios. In May, the index fell slightly, indicating that lending standards have tightened from the month before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says most of the tightening occurred for government and jumbo loans. “Last month’s tightening was most notable in the government and jumbo segments of the mortgage market,” Kan said. “The decrease in government credit was driven mainly by a reduction in streamline refinance programs, as mortgage rates increased sharply through May, slowing refinance activity.” The index component measuring conventional loans fell less than 0.5 percent. (source)

The housing market is expected to cool off this year. The number of homes for sale is forecast to increase while buyer demand slows from last year’s frenzied pace. Together, those two factors should help provide some relief to home buyers after years of historically low inventory and surging price spikes. But while a better-balanced market may be on the way, the change won’t happen overnight. It certainly hasn’t thus far. In fact, according to one recent measure of home prices which tracked data through the end of April, nearly 70 percent of homes sold this spring have sold for more than their asking price. That means attractive listings are still receiving multiple offers, as home shoppers face competition from other interested buyers. It also means summer home buyers should probably be prepared for a hot market. Inventory may improve in the months ahead, which will take some of the pressure off – but with prices still increasing by double-digits and the majority of homes for sale receiving multiple offers – hopeful home buyers will be better off if they’re financially ready for a fast-moving, competitive market. (source)

It makes sense that people worry we’re in a housing bubble. After all, it wasn’t that long ago that the market crashed and sent home values tumbling. But the recent spike in home prices has little in common with what was happening before the crash in 2008. Experts agree. A recent survey of economists found that the vast majority of them say what’s happening in today’s market is not a bubble. Why? Fundamentals. The home price increases we’ve experienced over the past few years are the result of an imbalance of supply and demand. Put simply, there are a lot of Americans interested in buying a home at the same time that the supply of homes available for sale is much lower than normal. In fact, the number of available listings is about 50 percent lower than it was just two years ago. When that happens, buyers have to compete for the homes that are on the market, which leads to bidding wars and higher prices. In other words, demographics and low inventory are the primary reason prices have been rising, and those aren’t factors that are likely to change anytime soon. (source)

Pandemic-related lockdowns made many Americans want more space. So when home buyers came back to the market, sales in the suburbs heated up. Buyers wanted bigger homes, larger yards, more privacy, and room for a home office. That trend continued throughout the pandemic. But now that things have opened up and fewer of us are working remotely, has the push for suburban and exurban homes died down? Well, one measure can be found in a recent report from the National Association of Home Builders. According to their Home Building Geography Index – which tracks where new homes are being built – residential construction has slowed in nearly all markets but particularly in large suburban areas. Robert Dietz, NAHB’s chief economist, says some of that is because of material costs but it’s also due to a shift in buyer preferences. “The more pronounced drop in growth for the large suburban markets is due to the easing of the rapid shift of home buyer preferences for the suburbs in the aftermath of the COVID-19 pandemic,” Dietz says. In other words, slower new home construction in the suburbs could be an early sign that buyer preferences are starting to shift back to pre-pandemic norms. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up for 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 increase was the first in three weeks. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says both refinance and purchase activity slowed as a result. “While rates were still lower than they were four weeks ago, they remain high enough to still suppress refinance activity …” Kan said. “The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past month. These worsening affordability challenges have been particularly hard on prospective first-time buyers.” Overall, mortgage application demand was down 6.5 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)

Fannie Mae’s monthly Home Purchase Sentiment Index measures how Americans feel about the housing market and economy. It asks respondents whether they think it’s a good time to buy or sell a house, whether they believe home prices and mortgage rates will rise or fall, and how they feel about their job and financial situation. In May, the index was relatively unchanged from the month before but saw an increase in the number of participants who said they think now is a good time to sell a house. In fact, 76 percent of survey respondents said they feel the market is right for sellers. Buyers, on the other hand, didn’t fare as well. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says Americans are feeling pessimistic about buying. “Respondents’ pessimism regarding home buying conditions carried forward into May, with the percentage of respondents reporting it’s a bad time to buy a home hitting a new survey high,” Duncan said. That pessimism is due, in part, to recent mortgage rate increases. But while spiking rates may have dampened buyer optimism, respondents don’t expect them to continue. Survey results show an increasing share of participants who said they think rates will fall in the coming months. (source)

The number of homes for sale has been lower than normal for years now. Home shoppers looking for a home to buy have had to compete over limited listings, which has led to bidding wars, rising prices, and frustration. But things may finally be changing. In fact, the number of active listings rose in May for the first time in three years, according to the National Association of Realtors’ consumer website. The national inventory of active listings increased 8 percent year over year, with newly listed homes up 6.3 percent. That’s the first year-over-year improvement since June 2019. It’s also encouraging news for home buyers, who have been dealing with a fast-paced market and challenging affordability conditions since the pandemic sent already low inventory even lower. But while the gains are welcome news, it’s only a start. Which means, though listings are improving, challenges remain. Inventory is still lower than normal, home prices are still up, and listings continue to sell quickly. In other words, the tide may be turning but, for now, home buyers still have to be prepared. (source)

Calculating how much house you can afford can be difficult. Not only do you have to take your budget and lifestyle into account, you also have to keep up on changes in the housing market. That’s particularly tricky these days. Quickly changing affordability conditions mean potential buyers have to regularly recalculate costs when considering which available homes are a good financial fit. Fortunately for home shoppers wondering about their potential costs, the Mortgage Bankers Association keeps a monthly measure of typical mortgage payments based on loan application data. In April, the data shows payments rose $153 from March, due mostly to higher mortgage rates. The median payment applied for by April applicants was $1,889, with FHA loan applicants seeing the most affordable payments at $1,374. Edward Seiler, MBA’s associate vice president of housing economics, says affordability conditions have become more challenging since the start of the year, but noted that “… prospective home buyers should start to see moderation from the double-digit price appreciation reported for well over a year in most of the country.” (source)

Every homeowner with a home to sell wants to attract qualified buyers. After all, the more interest there is in your home, the more likely it is that you’ll get a good offer. One way to measure interest is to pay attention to how many buyers are scheduling showings to tour your house. But how many showings does a listing typically see? Well, according to one recent analysis, the nationwide average number of showings per listing was 8.49 in April. In the top 25 markets, though, the average was closer to 15. Of course, a lot depends on the home you’re selling and its location. For example, showings have slowed this spring compared to last year’s competitive pace, but some regions have seen a bigger drop in activity than others. Wherever you are, though, there are bound to be buyers. Even in an unusual spring market, where mortgage rates and low inventory have dampened demand, there were still more than 100 markets in April averaging double-digit showings per listing. (source)