According to the Mortgage Bankers Association’s Weekly Applications Survey, the average loan size for purchase applications fell last week to $423,500. That’s the lowest it has been since January. It also could be an indication of who’s most active in the housing market right now. Joel Kan, MBA’s vice president and deputy chief economist, says it shows buyers are more active in affordable areas. “This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers search for more affordable options,” Kan said. But while buyers continue to search for more affordable options, overall demand for mortgage applications fell last week. It was the first decline in a month. Part of the reason for the decrease was a bump in average mortgage rates, which were up for most loan categories – including 30-year fixed-rate loans with both conforming and jumbo balances, FHA loans, and 15-year fixed-rate loans. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The ability to search online listings of available homes for sale changed the way home buyers shop houses. These days, the majority of buyers first look online to both get a feel for what’s available in their target area and to evaluate what they might be able to afford. Online listings can certainly be a helpful tool, but they also can cause stress, according to one new survey. The survey found 66 percent of young Americans routinely go online to check the estimated value of homes belonging to their friends. Among them, 59 percent say they do it to measure their own income and worth. This, not surprisingly, leads to feelings of stress and concern among 79 percent of the people who do it. That’s a pretty good reason to restrict yourself to only searching listings if you’re looking for ideas or hoping to better educate yourself about your local market. Otherwise, you may find yourself with a bad case of home envy. (source)

The National Association of Realtors keeps a measure of how many contracts to buy homes are signed each month. Its Pending Home Sales Index is considered a good indicator of future home sales, as contract signings typically precede closings by several weeks. In May, the index fell 2.7 percent from the month before, with pending sales down in three of four regions – only the Northeast saw an increase. Lawrence Yun, NAR’s chief economist, says demand remains resilient despite the slowdown. “Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” Yun said. “The lack of housing inventory continues to prevent housing demand from being fully realized.” In other words, the lack of homes for sale is the primary reason for slower contract signings. Demand from buyers remains strong and continues to outpace the supply of available, existing homes. (source)

The homeownership rate doesn’t change too drastically from year to year. It hit its record high in the second quarter of 2004, at 69.2 percent and its recent low in 2016 when it fell to 62.9 percent. In other words, the percentage of Americans who own a home has been pretty consistent. Over the past few years, though, there has been an increase. In fact, according to the Census Bureau’s first quarter report, the homeownership rate is currently 66 percent. That’s a fairly significant increase since 2016’s low. But what’s more surprising than the overall increase is the demographic that’s driving the gains. An analysis from Freddie Mac found that between 2016 and today, the rate increased the most for households making below the median U.S. family income. The homeownership rate for those households rose from 48 percent to 53.4 percent during that time. For comparison, the rate for households with a family income higher than the median only increased 0.8 percent over the same period. That means, despite a lower than normal number of affordable homes for sale, Americans are still finding ways to achieve their dream of owning a home. (source)

Housing market conditions differ from one location to the next. It’s true within metro areas and certainly from state to state. Buyers in California, for example, will most likely encounter a different dynamic than buyers in Ohio. That’s common knowledge. But while conditions can definitely vary by location, the latest results from the S&P Case-Shiller Home Price Indices, show home prices are climbing almost everywhere. “The ongoing recovery in home prices is broadly based,” Craig J. Lazzara, managing director at S&P, says. “Home prices peaked in June 2022, declined until January 2023, and then began to recover.” According to Lazzara, S&P’s National Composite index rose 1.3 percent in April (repeating March’s performance), and now stands 2.4 percent below its June 2022 peak. The indices – considered among the leading measures of U.S. home prices – not only found national numbers just below last year’s high, they also show month-over-month increases in all 20 major metropolitan markets included in the report. (source)

According to the Mortgage Bankers Association’s Weekly Application Survey, demand for loans to buy homes is rising. Last week, purchase application demand increased for the third straight week, reaching its highest level of activity in more than a month. Joel Kan, MBA’s vice president and deputy chief economist, says new homes are helping buyers find options. “Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20 percent lower than year ago levels,” Kan said. “New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market.” The increase in purchase activity came during a week when mortgage rates saw mixed results. The average rate for 30-year fixed-rate loans with both conforming and jumbo balances increased from the week before, as did rates for 5/1 ARMs. Rates for FHA loans and 15-year fixed-rate loans, on the other hand, saw declines. (source)

Sales of newly built single-family homes are skyrocketing, according to new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development. In fact, May estimates show sales up 20 percent from where they were last year at the same time and 12.2 percent higher than they were in April. The gains surpassed economists’ expectations and continued an upward trend for the new home market, furthering evidence that buyers are ready and looking to make a move. So why is the market for new homes so much hotter than the existing-home market? The simple answer is supply. There is a lack of previously owned homes available for sale right now and it’s pushing buyers to consider newly built options. The increased demand has helped home builders too, as housing starts also surged during the month, seeing their biggest increase in more than three decades. (source)

These days, there are fewer existing homes for sale and it’s helping to support price growth, according to a new commentary from Fannie Mae’s Economic and Strategic Research Group. The group releases an updated outlook each month covering what they expect from the housing market and overall economy in the days ahead. Their latest release addresses how the low inventory of homes for sale has kept prices strong even in the face of rising mortgage rates. “Housing prices continue to show stronger growth than what was previously expected given the suddenness and significant magnitude of mortgage rate increases,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, says. “Housing’s performance is testimony to the strength of demographic-related demand in the face of Baby Boomers aging in place and Gen-Xers locking in historically low rates, both of which have helped keep housing supply at historically low levels.” Fannie Mae expects demographic factors to keep inventory low for the foreseeable future, which should help prevent sharp price declines in most markets. (source)

Every buyer wants to get the most home for their money. That’s why demand spikes any time mortgage rates fall. We all want to get the best deal possible, and according to a newly updated 2023 forecast from the National Association of Realtors’ consumer website, our chances may be improving. Danielle Hale, the website’s chief economist, says affordability has been challenging so far this year. “The housing market has really seen a double whammy in 2023, with retrenchment in the number of homes for sale coupled with still-high prices and mortgage rates that have kept both first-time and repeat buyers on the sidelines,” Hale said. But while conditions have been challenging during the first half of the year, they should start to calm during the second half of 2023. For one, home prices are expected to remain mostly flat. The website’s forecast calls for prices to fall just 0.6 percent this year. Mortgage rates are also expected to slow as the year progresses, with the updated forecast calling for rates to gradually ease as inflation cools. That means improving affordability conditions for home buyers and a calmer, slightly more affordable housing market in the months ahead. (source)

In May, sales of previously owned homes rose 0.2 percent from the month before, according to new numbers from the National Association of Realtors. The increase, though slight, added to growing evidence that home buyers remain active and interested this year. Lawrence Yun, NAR’s chief economist, says steady rates have helped. “Mortgage rates heavily influence the direction of home sales,” Yun said. “Relatively steady rates have led to several consecutive months of consistent home sales.” But while steady rates have calmed buyers and led to increasing demand, the lack of available homes for sale continues to hold back sales. At the end of May, there was a 3-month supply of available existing homes for sale at the current sales pace. For comparison, a 6-month supply is considered healthy for the housing market. But though inventory remains low, the report found that it’s improving, rising nearly 4 percent from April to May. (source)