Rate Drop Shows Buyers Have Other Concerns

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week for just the second time since September. But, despite lower rates, demand for mortgage applications was unchanged from the week before. In fact, refinance activity – which is typically more sensitive to rate fluctuations – was down 1 percent and demand for loans to buy homes was up an equal amount. Joel Kan, an MBA economist, told CNBC rates are responding to several economic factors. “Treasury yields weakened last week following the release of more details around the administration’s tax reform plan and the announcement of a new Fed chair,” Kan said. But with rates down, why wasn’t there a corresponding spike in demand for loan applications? Well one reason could be that rates have been hovering within a narrow range for several months and may not be the factor influencing most home buyers this fall. With rates relatively steady, buyers may be more concerned with a lack of available homes for sale or higher prices in their market. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Housing Sentiment Cools Heading Into Fall

There are many reasons autumn is a good time to buy a house. But, because spring and summer are traditionally seen as the best seasons for home shoppers, the housing market often cools in the months following its busiest season. Evidence of this can be found in Fannie Mae’s most recent Home Purchase Sentiment Index. The index – which asks Americans for their feelings about buying and selling homes, mortgage rates, home prices, etc. – reached an all-time high in September but saw a decline in October. In short, fewer Americans feel now is a good time to buy or sell a house. But that’s normal, according to Fannie Mae’s chief economist, Doug Duncan. “The modest decrease in October’s Home Purchase Sentiment Index is driven in large part by decreases in favorable views of the current home-buying and home-selling climates, a shift we expect at this time of year moving out of the summer home-buying season,” Duncan said. “Indicators of broader economic and personal financial sentiment remain relatively steady.” In other words, because Americans generally feel better about their economic security, the dip in sentiment is likely to be temporary. More here.

Builders Optimistic About 55+ New Home Market

First-time home buyers get a lot of attention, and for good reason. Historically speaking, they make up around 40 percent of all home sales. And though the share has been lower in recent years, the trend among younger buyers is an important indicator for the real estate market and, therefore, gets a lot of press. But older Americans buy homes too, of course. For that reason, the National Association of Home Builders takes a quarterly measure of the market for new homes among buyers 55 and older. According to the most recent results, builders are optimistic about sales among older buyers, though there was a decline from the previous quarter. Robert Dietz, NAHB’s chief economist, says the dip was due to recent natural disasters rather than decreasing confidence. “The decline in the 55+ Single-Family Housing Market Index is consistent with slight softening of other measures of single-family construction seen recently, driven by the effect of the natural disasters on top of ongoing issues with the supply of labor, lots and some building materials.” Dietz said. “However, market conditions on balance remain favorable, and we expect gradual continued growth in the 55+ housing sector.” More here.

Early Forecast Sees Housing Gains Next Year

This year’s real-estate market has been a mixed bag. On the one hand, demand from home buyers has been strong and an increasing number of renters say they hope to one day own a home. But though there has been strong demand from buyers, there has been a lack of homes available for sale in many markets. Low inventory has caused home prices to continuing rising and sales – though higher than the year before – to fall below expectations considering the level of demand from potential buyers. So what’s in store for next year? Well, Lawrence Yun, the National Association of Realtors’ chief economist, sees improvement. According to Yun, continued economic gains should lead to more home sales and more new home construction. However, because for-sale inventory will remain a concern, Yun is cautiously optimistic. “An overwhelming majority of renters want to own a home in the future and believe it is part of their American Dream,” Yun said. “Assuming there are no changes to the tax code that hurt homeownership, the gradually expanding economy and continued job creation should set the stage for a more meaningful increase in home sales in 2018.” More here.

How Will Homes Change As Americans Grow Older?

Ipsos, an independent market research company, recently gathered a panel of experts to weigh in on the future of housing. From climate concerns to home automation, the panel looked at what changes may be necessary in order for our homes to meet our needs in the future. One of the topics focused on the fact that Americans are growing older. In fact, by 2060, nearly 100 million Americans will be over the age of 65 and – if current numbers are any indication – the vast majority of them will prefer to stay in their own homes and communities as they age. According to Rodney Harrell, director of livable communities for AARP’s Public Policy Institute, the current housing stock may not be suited to the needs of an aging population. “The problem is you can’t create a new housing stock overnight, so we have to start working now,” Harrell said. “Nobody should be forced from their home because it doesn’t work for them.” How our homes adapt to our needs will depend, in part, on advancements in smart-home technology but also on how soon builders and home remodelers begin installing features that make it easier for the elderly to preserve their independence. More here.

Mortgage Rates Rise To Highest Point Since July

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, with increases seen 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 increase was driven by economic speculation and a stronger global economy, according to Joel Kan, an MBA economist. “Rates increased last week as speculation over the next Fed chair continued, and the European Central Bank announced plans to taper its asset purchase program, signaling increased confidence in the euro zone economies,” Kan told CNBC. In short, as economic confidence rises, so will interest rates. Still, despite higher rates, demand for home purchase loans remains 10 percent higher than it was at the same time last year – though it did fall from one week earlier. Refinance activity was also down from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Where Do We Move When We Move Out Of State?

The United States is a big country and offers just about every type of climate and lifestyle imaginable. From urban to suburban, beach to mountaintop, there’s a lot to choose from if you’re someone looking to pack it up and move away from home. But which state you dream of, when you dream of moving away, really depends on where you currently live, it turns out. New research breaks down which state’s residents most want to move out of state and which destinations are most popular based on where they live. For example, Vermonters are most likely to want to leave home, with just over 24 percent of the residents looking to move. Among them, 14 percent wanted to move to Florida. North Dakotans, on the other hand, want to move to Minnesota most. Overall, Texans were the least likely to say they’d like to move out of state and the South was the region most popular with out-of-state movers overall. Not surprisingly, Florida was the top destination for a lot of Americans. The state was the most popular place to move among residents of 18 of the 50 states. However, more often than not, if residents weren’t hoping to move to Florida, their choice for out-of-state destination was a state neighboring the one closest to their current home. More here.

Single Women Make Up Nearly 20% Of Home Buyers

It’s no surprise that the most common type of home buyer is married couples. After all, taking on something as financially complex and long term as buying a home isn’t the type of thing you do with someone you just met. More surprising, though, is which demographic group comes in second to married couples among recent buyers. According to data from the National Association of Realtors’ 2017 Profile Of Home Buyers And Sellers, single women made up 18 percent of home buyers from mid-2016 through June of this year – the highest share since 2011. That more than doubles the number of single men buying homes, which actually falls below unmarried couples at just 7 percent. On top of that, single women tend to buy more expensive homes than single men, despite the fact that they earn less. So what’s behind the large number of single women becoming homeowners? Well, according to the NAR, “solid job prospects, higher incomes, and improving credit conditions” were among the factors driving a higher number of unmarried women toward homeownership. More here.

What It Means When A Home’s Sale Is Pending

There are a number of steps a home’s sale goes through between signing a contract to buy and finishing the closing process. During that time, the home’s sale is considered pending. Though the buyer’s offer has been accepted, the sale won’t be official for another few weeks. For this reason – and because most pending sales are expected to be completed successfully – they are considered a good indicator of future home sales. In fact, the National Association of Realtors tracks them each month as a way of forecasting where sales may be a month or so down the line. In September, the NAR’s Pending Home Sales Index found contract signings were flat from the previous month. But, though this might indicate home sales are beginning to slow, a closer look at the data shows that pending sales were actually up in the Midwest, Northeast, and West. The South, on the other hand, declined. According to Lawrence Yun, NAR’s chief economist, this is likely due to the recent hurricane in Florida. “Hurricane Irma’s direct hit on Florida weighed on activity in the South, but similar to how Houston has rebounded after Hurricane Harvey, Florida’s strong job and population growth should guide sales back to their pre-storm pace fairy quickly,” Yun said. In other words, though pending sales were flat for the month, they likely would’ve been higher if not for the impact of Hurricane Irma. More here.

New Home Sales Surge To 10-Year High

Sales of newly built single-family homes surged unexpectedly last month, according to new data released by the U.S. Census Bureau and the Department of Housing and Urban Development. In fact, sales were up nearly 19 percent from the month before and 17 percent over the same time last year. The increase was a surprise and far surpassed economists’ expectations, which called for a slight decline from August’s pace. All in all, any improvement in new home sales is encouraging news for the housing market. That’s because, demand for new homes spurs new residential construction, which helps alleviate upward pressure on prices by adding to the number of homes available for sale. In a competitive market, where there are more buyers than homes to buy, new home construction is among the quickest remedies for inventory shortages. However, though the gains are encouraging, new home sales data tends to be volatile from month-to-month and isn’t always reflective of the overall trend. Also in the report, the median sales price of new houses sold in September was $319,700. The average sales price was $385,200. More here.