Home Prices Ended 9-Month Upward Streak In November

Home prices slipped in November, breaking a nine-month streak of gains, but were up year-over-year. Prices were down 0.2% month-over-month from the month prior, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. This was the first monthly dip since January 2023. This was partly the result of mortgage rates spiking to peaks of nearly 8% in October 2023, driving demand down and forcing sellers to adjust their profit expectations. “The house price decline came at a time when mortgage rates peaked, with the average Freddie Mac 30-year fixed rate mortgage nearing 8%, according to Federal Reserve data. The rate has since fallen over 1%, which could support further annual gains in home prices,” Brian D. Luke, Head…

Buying Power Up $40K As Rates Moderate

Homebuyers, newly infused with extra spending power, are returning to the housing market as they come to terms with 6% rates and move to beat out increasing competition. Redfin reported that buyers on a $3,000 monthly budget have gained almost $40,000 in purchasing power as rates have fallen from a peak in October 2023. This theoretical buyer can afford a $453,000 home with a mortgage rate at roughly 6.7%. Just a few months ago, they could only snag a $416,000 home at a 7.8% interest rate, a $37,000 difference. Costs are easing for buyers across the income spectrum, of course. The monthly mortgage payment on the typical U.S. home (about $363,000) is $2,545 with a 6.7% rate but clocked in…

December Pending Home Sales Saw Biggest Increase Since 2020

Pending home sales soared in December, proving that price-sensitive buyers are jumping at the opportunity to lock in sub-7% rates. NAR’s Pending Home Sales Index rose by 8.3% month-over-month — their biggest increase since 2020 — to a reading of 77.3 in December. An index of 100 is equal to the level of contract activity in 2001. Year-over-year, they are up 1.3%. “The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” said Lawrence Yun, NAR chief economist. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.” All four U.S. regions saw declines both month-over-month…

Mortgage Rates Tick Up But Remain Under 7%

Mortgage rates inched up but remained within the mid-6% range, a welcome moment of stability after a rollercoaster year. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.69%, up from the week prior’s 6.60%. A year ago at this time, the 30-year FRM averaged 6.13%. The 15-year fixed also rose to 5.96% from 5.76%. A year ago, it averaged 5.17%. “The 30-year fixed-rate has remained within a very narrow range over the last month, settling in at 6.69% this week,” said Sam Khater, Freddie Mac’s Chief Economist.  “Given this stabilization in rates, potential homebuyers with affordability concerns have jumped off the fence back into the market. Despite persistent inventory challenges, we anticipate a busier spring homebuying…

New Home Sales Spiked In December

New home sales spiked in December as cooling rates encouraged purchase-shy buyers to make the leap. That’s according to data from the U.S. Census Bureau and the Department of Housing and Urban Development, which reported sales up by 8% from October to a seasonally adjusted annual rate of 664,000, a jump from the month priors’ revised rate of 615,000. December saw rates cool to the mid-6’s, a process that began in November but needed time to bear out fully. The data suggests potential buyers who were cautious at first eventually came to terms with slightly lower rates and jumped into the market. New home sales were up 4.4% from the same time last year. There were 453,000 new homes for…

Foreclosures Up, Trending Back To Pre-Pandemic Levels

By ERIN FLYNN JAY Foreclosure numbers are up by double-digit numbers and industry leaders say they will continue to rise this year. Earlier this month, ATTOM, a curator of land, property, and real estate data, released its Year-End 2023 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, scheduled auctions, and bank repossessions — were reported on 357,062 U.S. properties in 2023, up 10% from 2022 and 136% from 2021. CEO Rob Barber told The Mortgage Note several elements may be contributing to the rise in foreclosures. “Key among them is the increase in interest rates, especially for adjustable-rate mortgages, leading to higher monthly payments for homeowners. Additionally, escalating unemployment rates are a concern,” Barber said. Barber said…

Home Seller Profits Fall For The First Time Since 2011

Many Americans still can’t afford to buy a home as prices remain elevated and rates cool slowly, but sellers are already experiencing the unavoidable next step of price declines: falling profits. Profits on home sales fell last year for the first time since 2011 despite price gains, according to new data from ATTOM. Home sellers made a $121,000 profit on the typical sale in 2023, a 56.5% return on investment. This is a historically strong number – more than double what it was five years ago – but both gross profits and profit margins were down from 2022. At the same time, the national median home price increased at the slowest pace in 12 years. ATTOM noted that the data…

Direction Of Commercial Real Estate Market Unclear, But There Is A Glimmer Of Hope

By ERIN FLYNN JAY and KIMBERLEY HAAS As business models continue to change in the post-Covid economy, some market experts are predicting a commercial real estate crash while others are saying there could be a revival in investment opportunities. Desmond Lachman, an American Enterprise Institute senior fellow, recently wrote that high vacancy rates have already caused commercial property prices to decline. At the same time, property owners need to roll over around $500 billion in maturing loans at higher interest rates. Lachman said this spells trouble for the banking sector in general and the regional banks in particular. He predicted commercial real estate troubles could lead to the failure of 385 regional banks. “With as much as 18% of their…

Mortgage Applications On The Rise

Mortgage applications rose again despite rates moving slightly up last week. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – jumped 3.7%, adding to the week prior’s 10.4% spike. Adjusted purchase applications rose by 8%, while the unadjusted index increased by 3% and was 18% lower YOY. Demand may have been tempered by rates ticking up slightly from 6.75% to 6.78%. Still, even as buyers remain sensitive to rate movement they do appear to be leaping to lock in rates under 7%. “Mortgage rates increased slightly last week, but there continues to be an upward trend in purchase activity. Conventional and FHA purchase applications drove most of the…

Americans Willing To Think Outside The Box To Afford A Home

Nearly 80% of potential buyers are willing to get creative when it comes to purchasing a home. A new survey from RE/MAX found that homebuyers burdened by unaffordable listings and high interest rates are willing to consider atypical options to buy a home in the next 12 months. Those options include purchasing a home two or more hours away from the workplace and signing up for a super commute, buying a multi-family home, and moving into a tiny home. Purchasing a home in need of remodeling, for either cosmetic or structural reasons, is the most popular option with 56% of buyers saying they would buy a fixer-upper. Millennials in particular see buying a house in need of repairs as a…