Home construction lost ground in January, collapsing to the slowest pace in five months.
Residential home construction fell to a 1.33 million annual pace, down from a revised 1.56 million in December, according to data from the U.S. Census Bureau. This is the biggest drop since April 2020, and a far cry from Wall Street expectations of 1.45 million.
Single-family starts fared poorly, down by a 4.7% adjusted annual rate of 1.004 million units last month. But the driving factor was multifamily, which shrank by 35.6%, wiping out gains the month prior.
On the bright side, permits once again rose, besting last month’s 5-month high. Permits offer an indication of future construction.
Analysts partly attribute the inconsistency to severe winter…
Tough inflation data led to mortgage rates increasing for a second straight week.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.77%, up from the week prior’s 6.64%. A year ago at this time, the 30-year FRM averaged 6.32%.
The 15-year fixed jumped to 6.12% from 5.90%. A year ago, it averaged 5.51%.
“On the heels of consumer prices rising more than expected, mortgage rates increased this week,” said Sam Khater, Freddie Mac’s Chief Economist.
“The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more…
By ERIN FLYNN JAY
Compared to homeowners, renters feel bad about their finances, but in most of the country renting is the more affordable option right now.
A recent Axios Vibes survey by The Harris Poll shows that homeowners are nearly twice as likely to say they are getting ahead financially when compared to renters. 57% of renters and 29% of homeowners described their financial situation as “poor.”
According to Emily Peck, a markets correspondent at Axios, part of the problem is that the median asking rent in the U.S. is up 40% from the first quarter of 2020. With average hourly earnings rising only 20% during the same time period, wages did not keep up with costs.
Homeowners were…
Older Americans are choosing to age in their current homes, driving average tenure up to more than a decade and keeping inventory tight for buyers.
The typical homeowner spent 11.9 years in their current home, nearly double the 6.5-year average of two decades ago, according to a new report from Redfin.
This isn’t the longest on record – tenure peaked at 13.4 years in 2020 and declined during the pandemic buying boom. But it remains high, especially at a moment when inventory is difficult to come by.
The report attributes the data to Baby Boomers remaining in their homes late in life. Nearly 40% of this demographic have lived in their home for at least 20 years. An additional 16%…
With mortgage rates beginning to moderate, investors are back and snapping up the most wanted homes on the market.
Investors bought 26% of America’s lowest-priced homes in Q4 2023, according to a new report from Redfin, a record-high share and up from 24% at the same time last year.
By comparison, they bought 13.6% of mid-priced homes that sold and 15.9% of high-priced homes, both increases.
Investors are more choosey now than they have been in recent memory, looking for lower-cost homes they can rent or flip for better profits.
“I get tons of emails every day from investors looking for properties, but of course, they only want homes that are under market value, which are hard to come by.…
Mortgage applications are swinging up and down, falling last week as rates posted increases.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 2.3%, countering the week prior’s 3.7% rise.
Adjusted purchase applications slipped by 3%, while the unadjusted index increased by 4% and was 12% lower YOY.
Rates rose to 6.87%, their highest point since December, but have stayed in the mid-6% range since the beginning of 2024.
“Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago,” said Joel Kan, MBA’s…
By ERIN FLYNN JAY
Gross profits and profit margins remained near record levels for sellers last year but they decreased for the first time since 2011 in what could be seen as a sign of a cooling housing market.
ATTOM released its Year-End 2023 U.S. Home Sales Report on Jan. 24, which shows that home sellers made a $121,000 profit on the typical sale in 2023, generating a 56.5% return on investment.
Compare that to 2022, when the gross profit on median-priced single-family homes was $122,600 and the profit margin was 59.8%.
This drop in profits happened as the median nationwide home price rose at the smallest annual pace in more than a decade, according to ATTOM.
So is this…
Rates at 20-year highs and other ongoing issues forced affordability to hover near a decade-low in Q4 2023, constraining the housing market.
A new report from the National Association of Home Builders revealed that housing affordability stayed close to its lowest level in about a decade in the last quarter of 2023. Just 37.7% of new and existing homes sold in that period were affordable to families earning the U.S. median income of $96,300.
This is basically identical to Q3 2023, which posted the lowest-ever reading of the NAHB/Wells Fargo Housing Opportunity Index. That index has been tracking affordability since 2012.
The report attributes the data to rates hitting a 20-year high during Q4, along with the high cost of…
Rates stayed basically the same last week, inching up just slightly.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.64%, barely budging from the week prior’s 6.63%. A year ago at this time, the 30-year FRM averaged 6.12%.
Rates have stuck around the mid-6’s for about two months now.
The 15-year fixed decreased to 5.90% from 5.94%. A year ago, it averaged 5.25%.
“The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust,” said Sam Khater, Freddie Mac’s Chief Economist.
“Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly…
Though rates have stabilized in 2024, prices and stock shortages have kept home sales at bay, with pending sales down 8%.
This is the biggest decline in four months, according to a new report from Redfin.
Mortgage rates have stayed in the mid-6% range for several weeks, but Redfin noted that daily average rates saw their biggest one-day jump in more than a year on February 2, contributing to the dour data. Rates hit 6.8% last week, an increase.
January’s hotter-than-anticipated jobs report and signals from the Central Bank that it’s in no rush to cut rates have soured consumers’ moods on homebuying.
“We want to see more evidence that inflation is moving sustainably down to 2%. Our confidence is…
