Survey Finds Average Mortgage Rates Down

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates decreased last week 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 mortgages. Michael Fratantoni, MBA’s chief economist, says the Fed’s decision to leave rates unchanged led to the drop. “Treasury rates fell through the course of last week, as the Fed left their target rate unchanged, and concerns grew again about global growth, particularly in Europe and Japan,” Fratantoni said. “Refinance volume dipped for the week, but purchase application volume continues to show 2016 as a strong year.” Last week, demand for loans to buy homes was up slightly from the week before and 10 percent higher than the same week one year earlier. The size of the average loan was also up, however – which indicates that much of the buying activity remains on the higher end of the market. Refinance activity, on the other hand, was down 2 percent from the previous week, despite declining rates. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Are Down Payment Misconceptions Holding Buyers Back?

New research shows many potential home buyers have misconceptions about how much they need to have saved for a down payment. The most often cited amount is 20 percent of the price of the house. But, depending on the type of loan, it could be much less and large numbers of eligible buyers don’t know that. In fact, according to the National Association of Realtors’ quarterly HOME survey, awareness of low-down payment mortgage options was low across all age groups but particularly among Americans over 65 and under 35. In fact, almost 40 percent of young adults believe they’ll need more than 20 percent saved before they can buy a house. Lawrence Yun, NAR’s chief economist, says this misconception could be scaring off many would-be, first-time home buyers. “It’s possible some of the hesitation about buying right now among young adults is from them not realizing there are mortgage financing options available that do not require a 20 percent down payment, which would be north of $100,000 in some expensive areas in the country,” Yun said. “In fact, most first-time buyers put down much less. In the 35-year history of NAR’s Profile of Home Buyers and Sellers – the longest-running survey series of national housing data – the average median down payment has been 5 percent for first-time buyers.” More here.

New Home Sales Fall After Spiking In July

Sales of newly built, single-family homes fell in August after rising to the fastest sales pace in 9 years the month before. The data, released by the U.S. Census Bureau and the Department of Housing and Urban Development, shows new home sales down 7.6 percent month-over-month, though they remain nearly 21 percent higher than last year. But though the monthly decline may seem like a setback, there are a number of encouraging signs in the report for prospective home buyers. For starters, the number of new homes on the market rose nearly 2 percent last month. With inventory low, an increasing number of new homes available for sale is a promising sign, especially when combined with the fact that building permits also rose in August. That may indicate future gains to inventory levels across the country. And, with rising inventory, price increases should begin to moderate. For example, this month’s report shows the median price for a new home fell 5.4 percent from one year ago. In fact, the median sales price of new homes sold in August was $284,000; the average sales price was $353,600. Also in the report, new home sales were down sharply in the Northeast and South. The West saw an 8 percent increase and the Midwest fell 2.4 percent. More here.

Does The Buying Season Really Start In Fall?

Traditionally, the housing market heats up in the spring and continues to sizzle through the summer months. There are many reason this is true – including more favorable weather and the school year. However, if you’re able to choose when you buy your next home, spring and summer may not be the best times to buy. In fact, according to an analysis from NerdWallet, sale prices peak in June and July then begin falling in autumn. However, that’s actual sale price, not what the home was listed for. The data showed listing prices dropped less than half a percent in fall but sale prices fell nearly 3 percent by November. That’s $8,300 less on a median-priced home. And if you can wait even later, winter offers the best savings. Because fall and winter see fewer buyers active in the market, there is less competition and more room for negotiating a better price. Realtor.com chief economist, Jonathan Smoke, says buying is best the later you wait. “If your circumstances give you the freedom to be able to choose the best time to look to sign a contract on a new home, there’s no question that the market dynamics favor you the most to do that in the dead of winter, ideally in January or February, right before the activity starts to heat up,” Smoke said. More here.

Typical Home In August Sold In 36 Days

In August, the typical home for sale sold in just 36 days, according to new data from the National Association of Realtors. That’s 11 days quicker than last year. Additionally, nearly half of all homes sold were off the market in less than a month. Homes are selling faster and part of the reason is that, in many markets, there are fewer homes available for sale. With fewer homes on the market and buyer demand high, the homes that are for sale are likely to be swept up quickly. Unfortunately, too few homes for sale may also be responsible for overall sales slowing as the summer season draws to a close. August numbers show sales of previously owned homes down 0.9 percent from the month before. Lawrence Yun, NAR’s chief economist, says short supply is behind many of the housing market’s current issues. “There’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold,” Yun said. Still, regional results show sales up slightly from one year ago everywhere but the Northeast, where they are unchanged from last year but up 6.1 percent month-over-month. More here.

Average Mortgage Rates Up Over Week Before

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week 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 mortgages. Rates increased to levels last seen in June, though they remain low by historical standards. Michael Fratantoni, MBA’s chief economist, told CNBC the jump was spurred, in part, by speculation that the Federal Reserve may raise interest rates this week. “Mortgage rates increased to their highest level since June last week as comments by some Fed officials made it appear that the Federal Reserve is closer to raising rates,” Fratantoni said. “The average refi loan size fell to its lowest level in three months as more jumbo borrowers left the market.” But while refinance and purchase application demand did fall from one week earlier, they both remain up from last year, with refinance activity 26 percent higher than at the same time one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Permits To Build New Homes On The Rise

New numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development show the number of authorized permits to build single-family homes rose 3.7 percent in August. That encouraging news was the bright spot in an otherwise lackluster August residential construction report. However, because permits are generally a good indicator of future activity, the rise in single-family authorizations could be a good sign for future new home construction. And, because new home construction helps balance the market, that could be good news for home buyers in the months ahead. Still, August’s numbers were lower than expected. In fact, overall housing starts – which refer to the number of homes that broke ground – fell 5.8 percent, largely due to a significant drop in construction in the South. The Northeast, West, and Midwest, on the other hand, all saw gains. New home construction is particularly important right now because many markets are suffering from a lower-than-usual number of homes for sale. Without a significant boost, low inventory will continue to push prices higher while limiting the number of homes prospective buyers have to choose from. Fortunately, buyer demand has remained high so far this year, mostly because low mortgage rates and rising incomes have helped offset the upward pressure on prices caused by limited inventory. More here.

How Builder Confidence Affects Home Prices

You may not have given any thought to whether or not home builders are feeling optimistic about the market but it has something to do with you. Whether you’re a prospective home buyer or an owner looking to sell their house, the new home market plays a role. That’s because, when builders are feeling confident that there are serious buyers out there, they build more homes and that leads to home prices leveling off. In other words, when there are more homes for sale, price increases slow. So how are home builders feeling currently? Well, according to the National Association of Home Builders’ Housing Market Index – which scores builder confidence on a scale where any number above 50 indicates more builders feel good than poor – they are feeling better than they have in almost a year. In fact, September’s index reached 65, the highest since last October. Ed Brady, NAHB’s chairman says the results are a positive sign for the entire housing market. “As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move forward,” Brady said. “The single-family market continues to make gradual gains and we expect this upward momentum will build throughout the remainder of the year and into 2017.” More here.

Price Gains Boost Homeowners’ Bottom Line

One of the traditional arguments in favor of homeownership is that it helps build wealth. That’s based on the fact that, as you pay your off your mortgage, you are gaining an ever-larger percentage of ownership. The other part of that equity equation is dependent on rising home values. When prices go up, a homeowner benefits from the ability to sell their house for more than they paid for it. Over the years, steady price increases and regular mortgage payments could help homeowners boost their bottom line. Unfortunately, when the housing market turns downward – as it did following the housing bubble – homeowners are also on the hook for any losses in value. The good news, however, is that buying a house is typically a long-term investment and things tend to bounce back. In fact, much of the housing market’s most recent losses have been reversed. New numbers from CoreLogic show the number of homeowners still suffering from negative equity is dwindling. In fact, 92.9 percent of all mortgaged properties now have positive equity. Frank Nothaft, CoreLogic’s chief economist, says price increases have played a large role in reducing the number of owners who owe more on their mortgage than their home is worth. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier,” Nothaft said. More here.

5 Features That Attract First-Time Buyers

There’s a growing number of young Americans who say they want to buy a house sometime in the next few years. In fact, a recent survey found large majorities of people between the ages of 18 and 34 who are planning to buy. That means, there’s going to be growing demand for midsized homes. Specifically, midsized homes with features that millennial buyers want. But what are those? Well, for one, a backyard deck. According to Trulia, 59 percent of millennial home buyers say they want one. An almost equal number of survey respondents said they’d like a balcony with a view. In other words, like most buyers, younger Americans want outdoor spaces that extend their living space and can be used for entertaining family and friends. Similarly, they also prefer an open floor plan and a gourmet kitchen. Kitchens, of course, are always important with buyers of any demographic. However, there is one feature nearly half of all surveyed millennial buyers wanted that is easy to add to your existing home without breaking the bank: A vegetable garden. A renewed interest in simple, healthy lifestyles has made vegetable gardens – or, at the very least, a good spot to start one – a must for 40 percent of younger home buyers. More here.