Category: News
Mortgage Rates Inch Lower
February 20, 2025
Mortgage rates continued to trend down in the latest Primary Mortgage Market Survey published by Freddie Mac (OTCQB: FMCC).
The 30-year fixed-rate mortgage averaged 6.85% as of Feb. 20, down from last week when it averaged 6.87%. A year ago at this time, it averaged 6.90%.
The 15-year fixed-rate mortgage averaged 6.04%, down from last week when it averaged 6.09%. A year ago at this time, it averaged 6.29%.
“Mortgage rates decreased slightly this week,” said Sam Khater, Freddie Mac’s chief economist. “The 30-year fixed-rate mortgage has stayed just under 7% for five consecutive weeks and in that time has fluctuated less than 20 basis points. This stability continues to bode well for potential buyers and sellers as we approach the spring homebuying season.”
Mortgage Application Activity, Credit Availability on the Rise
February 12, 2025
More people were filling out mortgage applications during the week ending Feb. 7, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, increased 2.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index jumped by 6% compared with the previous week.
The seasonally adjusted Purchase Index dipped 2% from one week earlier while the unadjusted index increased 4% compared with the previous week – the latter was 2% higher than the same week one year ago. The Refinance Index increased 10% from the previous week and was 33% higher than the same week one year ago while the refinance share of mortgage activity increased to 40.2% of total applications from 39% the previous week.
Among the federal programs, the FHA share of total applications decreased to 16% from 16.2% the week prior while the VA share of total applications increased to 14.6% from 13.3% and the USDA share of total applications remained unchanged at 0.5%.
Separately, the MBA reported that mortgage credit availability increased in January. The organization’s Mortgage Credit Availability Index (MCAI) rose by 2.5% to 99.0 in January; the index was benchmarked to 100 in March 2012.
The Conventional MCAI increased 3.8% while the Government MCAI inched up by 1.0%. Of the component indices of the Conventional MCAI, the Jumbo MCAI rose by 5.3% and the Conforming MCAI had a 0.5% uptick.
“Credit availability increased to start 2025, driven by conventional credit supply rising to its highest level since June 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “There were expanded loan offerings for cash-out refinances, along with more jumbo and non-QM loan programs. Although similar to last month, these were limited to borrowers with better credit. All other subindexes saw increases in January, a positive development for the spring homebuying season, if these trends continue.”
Report: 2024 Housing Market Gained $2.5 Trillion in Value
February 19, 2025
The US housing market gained $2.5 trillion in value in 2024 to reach $49.7 trillion, according to a new data report from Redfin (NASDAQ: RDFN). But while the total value of the housing market grew 5.2% year-over-year, this represented the slowest growth in a calendar year since 2019 and the second slowest since 2011.
Redfin added the total value of housing market has more than doubled over the past decade, from $23 trillion in 2014, while the combined value of the nation’s homes peaked at $50.4 trillion in July. The drop to $49.7 trillion was reflective of seasonal sales trends, the company added.
Major metros in the Northeast gained the most value in percentage terms in 2024, led by the upstate New York markets in Albany and Rochester in upstate New York. Albany’s aggregate home value rose 11.3% to $110.7 billion while Rochester’s total value increased 11.2% to $124.3 billion. Redfin observed the rising value can be attributed to a shortage of homes for sale in the region, thus driving up prices.
Among housing sectors, rural home values outpaced those in urban areas and the suburbs for the seventh consecutive year, jumping 6.4% year over year to $8.1 trillion. The total value of homes in urban areas rose 4.9% to $10.6 trillion, while the value of homes in the suburbs increased 5.1% to $30.8 trillion. There are around 59 million homes in the suburbs, compared to 23 million in urban areas and 22 million in rural areas.
“There are more homes for sale right now than in recent years and that has led to buyer’s markets in many areas of the country. That’s good news, but it doesn’t mean homes are getting cheaper—prices continue to tick up each month,” said Redfin Economics Research Lead Chen Zhao. “We expect prices—and therefore home values—to keep rising steadily this year because there are still enough buyers competing over a relatively small number of listings, compared to before the pandemic.”
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MAKING SENSE OF MARKET MOVES
September 6, 2024
After months of the housing market struggling from high prices and lack of available inventory, new data this week shows that there’s still strong demand among buyers. Declining mortgage rates have been a boon for homebuilders and consumers alike, as new home sales reached their highest levels since May 2023 and beat estimates for the month of July. Mortgage rates reached their lowest level since April 2023 this month after data showed the labor market was cooling.
“In our view, while housing demand is challenged, the US housing market has a supply problem, not a demand problem,” wrote Morgan Stanley strategist James Egan in a note today. “Significant improvements in affordability should help demand and therefore lead to higher sales volumes.”
The numbers speak for themselves:
Sales of freshly constructed homes rose to 739,0000 in July, up 10.6% from 668,000 in June, the Commerce Department said today. Analysts expected the number to be more like 620,000. However, prices are still high. The median sales price of a new home in July jumped to $429,800, up from $416,700 last month. Broadly, sales of new homes are up 5.6% year-over-year. Closed sales of previously owned homes jumped 1.3% in July, the first gain in five months, according to the National Association of Realtors, which reported July data on Thursday.
Real estate brokerage Redfin found that requests for home tours from their agents rose 4% over the last week, they said yesterday.
“Assuming 6.5% mortgage rates, affordability has improved ~12% from 4Q23, a quantum of improvement that has only happened a few times in the last 40 years,” wrote Egan.
Maybe that means now is the time to circle back to your bookmarked Zillow pages (but no, you probably still can’t afford that $29 million fairy tale castle in Woodstock, Connecticut).
THE NAR SETTLEMENT AND WRITTEN BUYER AGREEMENTS
August 19, 2024
The following comes from the legal branch of the North Carolina Association of Realtors related to written buyer agreements.
Under the new MLS rules, an agent “working with” a buyer must have a written buyer agreement prior to touring a property.
The written buyer agreement needs to be an agency agreement. In North Carolina brokers may not undertake to provide any brokerage services without an agency agreement. For transactions prior to these new rules being implemented, agents were often working for a buyer under an oral agency agreement up until the time an offer was going to be submitted. Now that agents working with a buyer must have a written agreement pursuant to MLS rules, the written buyer agreement must constitute an agency agreement to comply with North Carolina law.
For live walk-through virtual tours by Brokers for those buyers at a distance, a written buyer agreement to do a virtual tour requires a buyer agreement to be signed. The law applies to Brokers whether the prospective Buyer is physically at the location or elsewhere watching a live virtual tour walk-through.
The does not require a written buyer agency agreement for recorded virtual tours. A Broker agent sharing information already available online and the Broker does not go to the subject property.
A written buyer agreement to show a commercial property or vacant land does not apply to a written buyer agreement, it is only needed when Brokers are touring a residential property. When selling commercial property or vacant land, there i
SELLERS LOSE THEIR ADVANTAGE, BUT LOWER RATES MAY REVIVE MARKET COMPETITION
Competition for homes and price appreciation tapered off faster than normal in July as high housing costs continued to stymie shoppers. But recent drops in mortgage rates should spur more competition as we head into fall.
Sellers lose the upper hand
Sellers gave up an advantage over buyers in July on the national scale, as the Zillow market heat index moved into neutral territory for the first time since December. This marks the first July the national market has been neutral since 2019 – in each of the past two years, the market moved into neutral ground in October.
One sign of decreased competition is homes taking longer to sell. Homes that went pending in July typically did so after 18 days on the market. That’s almost a week longer than last July.
Inventory continues to accumulate, and now stands nearly 25% above last year’s levels, marking the eighth straight month the year-over-year inventory gap has widened. The inventory shortfall compared to pre-pandemic norms shrank a bit and is now down 31.5%, the smallest deficit since October 2020.
More options for buyers means less intense competition for each home. That’s evident in the growing share of home sellers cutting their prices. More than 26% of homes on Zillow received a price cut in July, the highest share for any July since at least 2018, when the dataset began.
What happens next?
If this relief from mortgage rates holds, we should see more buyers re-starting their hunt for a home. By the end of July, lower rates made a new homeowner’s mortgage payment on the typical home just under $200 more than it would take to rent the same kind of property. That’s shrunk from a $247 gap as recently as April. Now, lower rates in August are making buying even more attractive by comparison.
Lower rates aren’t likely to encourage a comparable wave of current homeowners to sell. Zillow surveys show 80% of recent sellers were influenced by major life events, such as a change in their household size or working situation. New listings typically surge in spring and then taper off as homeowners aim to sell, buy another house, and be moved in before school and the fall holidays begin.
More demand without a corresponding increase in supply would likely mean competition ramping back up, or at least a delay in the usual post-summer cooldown.
Home values
- The typical U.S. home is worth $362,156.
- The typical monthly mortgage payment, assuming 20% down, is $1,900. That is up 3.4% from last year and has increased by 111.1% since pre-pandemic.
- Home values climbed month over month in 34 of the 50 largest metro areas in July. Gains were biggest in Providence (1%), New York (0.9%), Hartford (0.9%), Buffalo (0.9%) and Cleveland (0.8%).
- Home values fell, on a monthly basis, in 13 major metro areas in July. The largest monthly drops were in San Jose (-0.4%), Austin (-0.4%), Phoenix (-0.3%), San Francisco (-0.2%) and Pittsburgh (-0.2%).
- Home values are up from year-ago levels in 44 of the 50 largest metro areas. Annual price gains are highest in San Jose (10.6%), Hartford (9.1%), San Diego (7.8%), Providence (7.4%) and New York (6.8%).
- Home values are down from year-ago levels in four major metro areas: New Orleans (-5.3%), Austin (-4.6%), San Antonio (-2.9%) and Birmingham (-0.7%).
New listings & total inventory
- New listings decreased 6.3% month over month in July.
- New listings increased 6% compared to last year.
- New listings are 24.7% lower than pre-pandemic levels.
- Total inventory (the number of listings active at any time during the month) increased 1.3% month over month in July.
- There were 24.6% more listings active in July compared to last year.
- Inventory levels are 31.5% lower than pre-pandemic levels.
Price cuts & share sold above list
- 26.2% of listings in July had a price cut. That is up 1.8 percentage points (ppts) month over month.
- There are 4.5 ppts more listings with a price cut compared to last year.
- 35.4% of homes sold above their list price last month. That is up 0.2 ppts month over month.
- 5 ppts fewer homes sold above their list price compared to last year.
Newly pending listings
- Newly pending listings decreased by 1.2% in July from the prior month.
- Newly pending listings increased by 1% from last year.
- Median days to pending, the typical time from the initial list date to moving to pending status for homes that went under contract, was at 18 days in July. That is up three days from the month before and up six days from last year.
TOTAL US HOME VALUE AT $49.6 TRILLION RECORD HIGH
August 12, 2024
The total value of US homes gained $3.1 trillion during the past 12 months, a 6.6% year-over-year spike that resulted in a new record high of $49.6 trillion, according to a data report from Redfin (NASDAQ:RDFN).
On a decade-over-decade measurement, the total value of US homes climbed nearly 120% from $22.7 trillion in June 2014.
Among the nation’s major metro areas, 13 markets posted year-over-year double-digit percentage gains in total property value, most notably in New Brunswick, New Jersey (up 13.3% to $582.6 billion), Newark, New Jersey (up 13.2% to $406.2 billion), Anaheim, California (up 12.1% to $1.1 trillion), Charleston, South Carolina (up 11.8% to $188.9 billion), and New Haven, Connecticut (up 11.8% to $91 billion). Eight metros recorded total home values over $1 trillion, doubling from four a year ago.
Cape Coral, Florida, was the only major metro with a year-over-year decline in total home value, falling 1.6% to $204.2 billion.
“The value of America’s housing market will likely cross the $50 trillion threshold in the next 12 months as there are not enough homes being listed to push prices down,” said Redfin Economics Research Lead Chen Zhao. “Mortgage rates have started falling, but many potential sellers and buyers are waiting to make a move, meaning we are likely to continue seeing a pattern where prices slowly tick up. That’s great news for the millions of American homeowners who see their equity rising, but first-time buyers are going to keep finding it tough to find an affordable home.”
MORTGAGE RATES PLUNGE TO LOWEST LEVEL IN OVER A YEAR
August 8, 2024
The 30-year fixed-rate mortgage averaged 6.47% as of Aug. 8, down from last week when it averaged 6.73%. A year ago at this time, it averaged 6.96%.
The 15-year fixed-rate mortgage averaged 5.63%, down from last week when it averaged 5.99%. A year ago at this time, it averaged 6.34%.
“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing,” said Sam Khater, Freddie Mac’s chief economist. “The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move. Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42%, the highest since March 2022.”
HOME PRICE GROWTH CONTINUES TO COOL
August 7, 2024
Home price growth cooled for the second consecutive month in June as year-over-year gains inched down to 4.7%, according to new data from CoreLogic. This is down slightly from the 4.9% year-over-year gains in May.
However, June also marked the 149th consecutive month of annual growth. Month-over-month, home prices rose just 0.3% from May to June.
While no states posted annual home price declines in June, only South Dakota posted double-digit growth at 10%. Behind South Dakota, the other states with the highest increases year over year were New Jersey (9.3%), Rhode Island (9.2%), Connecticut (8.5%), and New Hampshire (8.2%).
Looking ahead, CoreLogic is forecasting the rate of growth to decrease by more than half of its current rate, with prices expected to grow by only 2.3% on a year-over-year basis next summer.
“Housing market activity essentially froze at the end of the spring homebuying season as high mortgage rates continued to compress affordability and dissuade potential homebuyers, said Dr. Selma Hepp, chief economist for CoreLogic. “The 0.3% gain in prices from the month before was less than half the increase seen between May and June prior to the pandemic, when the gains averaged 0.8%. In addition, cooling home prices continued to spread across more markets, and nine states reported a monthly decline, up from three states last month. The April surge in mortgage rates notably weighed on consumer sentiment, and consumers increasingly chose to respond to the anticipation of a lower mortgage rate environment later this year.”