Is Housing Market Heading Back to ‘Normal?’

Signs of softening housing markets and a leveling of mortgage interest rates have some industry observers asking if America is heading back to a ‘normal’ home-buying market. “For first-time buyers, more options and favorable financing offer the promise that after a year of frustrating bidding wars, finding the right home may finally be within reach,” George Ratiu, manager of economic research at Realtor.com said this week. “More listings are coming to the market these days, which is alleviating some of the supply crunch that prompted record increases in home prices.” Marco Santarelli, founder of Norada Real Estate Investments, says “new sellers are entering the market at near-normal levels,” in part thanks to cooling home prices. “Median listing prices in several…

Freddie Mac: Weekly Mortgage Rates Remain Unchanged

Freddie Mac’s latest Primary Mortgage Market Survey (PMMS®) showed rates remain virtually unchanged this past week. The rate on a 30-day fixed rate mortgage averaged 2.87%, the same as last week and lower than the 2.93% average a year ago. Rates on 15-year fixed-rate mortgages averaged 2.18%, nearly identical to the 2.17% rate in the previous week. Fifteen-year rates averaged 2.42% a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.43%, up from 2.42% last week and lower than the 2.93% rate a year earlier. “Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort and leading to a stabilization in mortgage rates,” said Sam Khater, chief economist at Freddie Mac. “Heading…

Redfin: Pending Home Sales Rose Just 9%, Lowest Since April 2021

Stagnating home prices and an influx of new homes for sale created a 9% dip in August pending home sales, the lowest they’ve been since April 2021, a Redfin report shows. The report showed asking prices of newly listed homes up 10% from last year to a median of $354,665, the lowest level since late April and down 1.8% from mid-June’s all-time high. Nationally, the inventory of homes actively for sale in August decreased by 25.8% over the past year, a lower rate of decline than July’s 33.5% decrease.  The inventory of active listings is still down 52.8% from 2019. The number of active listings nationally declined by 25.8% over the last year, while the total inventory of unsold homes…

FHFA Announces Two Key Hires

The Federal Housing Finance Agency named Laura Thrift as the new Director of the Office of Congressional Affairs and Communications and Alexei Alexandrov (above) as Chief Economist on Monday. Thrift has more than 15 years of experience on Capitol Hill working for senior members of the House of Representatives. Before joining FHFA, Thrift was the Deputy Chief of Staff for Rep. Earl Blumenauer (D-Ore). Thrift previously served as Senior Policy Advisor to Rep. David Price (D-N.C.) Prior to joining FHFA, Alexandrov, a Ph.D. economist, was the director of Central Algorithms for Wayfair.com. He also worked as a senior manager at Amazon.com. Additionally, he served as a senior economist at the Consumer Financial Protection Bureau, working on mortgage regulations stemming from…

FHFA HPI Beats Its Own Record, Again

The FHFA’s Q2 House Price Index (HPI) saw its largest ever annual gain, with house prices rising 17.4% year-over-year, up from 12.6% in the last quarter. This surge in home prices breaks the previous record, set in Q1. The FHFA HPI measures the movement of single-family house prices by reviewing repeat mortgage transactions on homes whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. “During the second quarter, house prices peaked in June with an 18.8 percent growth rate compared to a year ago,” said Dr. Lynn Fisher, Deputy Director of FHFA’s Division of Research and Statistics. “For the quarter, annual gains surpassed 20 percent in the Mountain, New England, and Pacific census divisions and…

Mortgage Applications Down 2.4% Last Week

Despite no change in historically low mortgage rates, mortgage applications dropped 2.4% last week, according to the Mortgage Bankers Association’s Weekly Mortgage Application Survey. The MBA said the decline in its seasonally adjusted market composite index tracking mortgage applications was influenced by a 3.8% decline in applications to refinance existing loans. “There was little change in mortgage rates last week, with the 30-year fixed remaining at 3.03 percent. Despite low rates, refinance applications declined, with some borrowers still waiting for rates to drop even lower,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.  “Recent uncertainty around the economy and pandemic have kept rates low over the past month, which is why the refinance index has oscillated…

Number Of Mortgage Loans In Forbearance Holds At 3.25%

The  number of mortgage loans in forbearance remains unchanged from last week, holding at 3.25%, according to the latest numbers from the Mortgage Bankers Association. The report, released yesterday, estimates that 1.6 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance remained the same relative to the prior week at 1.66%. Ginnie Mae loans in forbearance also remained the same at 3.92%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 3 basis points to 7.18%.  The percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 2 basis points to 3.50%, and the percentage of loans in forbearance for depository servicers was unchanged at 3.35%. But…

Experts Warn Housing Affordability Will Likely Worsen, Even As Prices Cool

Home prices in the major world housing markets that have soared since the COVID-19 pandemic began have likely peaked, but affordability is set to remain stretched or worsen in the next few years, according to a new Reuters poll of experts. Reuters poll of more than 100 property market experts taken Aug. 10-25 covering eight markets – the US, Canada, Britain, India, Australia, New Zealand, China and Dubai – mostly predicted price increases over the next two years would slow. But house price inflation is still expected to outpace wage increases, especially when rising material costs are taken into account. Out of 94 poll respondents, 49% said housing affordability would worsen across all markets in the next few years, and…

REPORT: 941,392 Homes Threatened By Ida Storm Surge

A trifecta of damaging winds between 130-156 mph, dangerous storm surge, and extremely heavy and widespread rainfall between 10-15 inches is expected to put 941,392 homes in the Louisiana, Alabama and Mississippi coastal areas at risk for storm surge damage, according to data analysis for single-family and multifamily homes released by CoreLogic®.  The reconstruction cost value of all at-risk homes totals more than $200 billion. Storm surge is the abnormal rise in seawater level during a storm, measured as the height of the water above the normal predicted astronomical tide. The surge is caused primarily by a storm’s winds pushing water onshore and can cause significant property damage. “Atmospheric conditions are highly favorable for rapid intensification after Ida emerges from…

RHPI: Home Buyers Had 129% More House-Buying Power In June Than 2006

Homebuyers in June 2021 had 129 percent more house-buying power than in 2006, according to the June 2021 First American Real House Price Index (RHPI), released today. “House-buying power, how much one can buy based on changes in income and interest rates, increased by 6.8 percent in June compared with a year ago, propelled by lower mortgage rates and higher household income,” said Mark Fleming, chief economist at First American Financial Corporation, which releases the RHPI. First American is a leading global provider of title insurance, settlement services, and risk solutions for real estate transactions. “The affordability gain from increased house-buying power, however, was offset by the third component of the RHPI, nominal house price appreciation, which reached a record…