Buyer Sentiment Falls To All-Time Low As Unaffordability Remains Problematic

Americans are increasingly pessimistic about their long-term prospects in the housing market, citing unaffordability as their main concern. Fannie Mae’s Home Purchase Sentiment Index fell 2.5 points in May to a reading of 69.4, a record low for the survey. Just 14% of respondents believe it’s a good time to buy a home, a steep drop from the month prior’s 20%. Altogether, 86% of Americans think it’s a bad time to buy. “Consumer sentiment toward housing declined from its recent plateau, as an increasing share of consumers struggle to find the positives in the current housing market,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “While many respondents expressed optimism at the beginning of the year that…

Southern States Double Down On Affordable Inventory

The South has lost its sparkle for American movers in the post-pandemic world, but that could change as the region doubles down on producing affordable inventory. More than half of all available inventory in April 2024 was concentrated in Southern states, according to an analysis by Realtor.com.  They also boasted the most new listings at 19.7%. In contrast, inventory rose by just 7.5% in the West and 2.9% in the Northeast. The Midwest came in a close second at 18.4%. “Sellers continued to list homes at a greater rate than last year. This has led to a promising increase in more affordable homes for sale, especially in the South,” Realtor.com Chief Economist Danielle Hale said. Florida metros saw the most…

Rates Jump After Dour Inflation Data

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…

Rates Hold Steady at 6.64%

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…

Housing Market Posts Positive Indicators But Home Prices Remain Elevated

The housing market may be impossible for the average American now, but hold on a while longer: it’s heading in the right direction. That’s ICE’s message, at least, with its latest Mortgage Monitor report, which revealed a mix of good and not-so-good data about the state of homebuying. Affordability is improving, for one, as rates come down. The share of income required to purchase the median home fell close to 5 percentage points from October 2023’s peak. Stock is also slowly recovering, up for a seventh consecutive month. Lack of inventory has contributed to high prices and competition, making the bidding process a nightmare for many buyers in the last few years. But home price appreciation remains off the charts.…

Rates Fall To 6.60%

Mortgage rates have slipped to their lowest levels since May. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.60%, down from the week prior’s 6.66%. A year ago at this time, the 30-year FRM averaged 6.15%. The 15-year fixed fell to 5.76% from 5.87%. A year ago, it averaged 5.28%. “This is an encouraging development for the housing market and in particular for first-time homebuyers who are sensitive to changes in housing affordability,” said Sam Khater, Freddie Mac’s Chief Economist. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.” Rates are the primary concern of most potential buyers, but the market remains crippled by ongoing stock shortages…

Affordability FIopped In 2023, But Redfin Predicts A Brighter New Year

This year was one of the worst on record for affordability. But with the market at an all-time low, the only move now is up, according to a new analysis by Redfin. A homebuyer with the median U.S. income needed to spend 41% of their earnings on monthly home costs in 2023, a record high in Redfin’s data (dating to 2012) and fully 10% more than just two years ago.  In some hot markets, like California’s Anaheim and San Francisco, that number jumps to more than 80%. But Redfin expects mortgage rates and home prices to both cool in 2024, paving the way for more Americans to buy their dream home. “A perfect storm of inflation, high prices, soaring mortgage…

Affordability Hits Lowest Point In Three Decades

As home prices spike and interest rates stay elevated, affordability has fallen to its lowest point in more than three decades. First American Financial’s Real House Price Index soared by 16.9% YOY in July, the latest available data, and was up 2% from the month prior. But consumer buying power sank, down 1% month-over-month and 11% YOY. The RHPI is controlled for house-buying power, measuring the impact of income and interest rate changes, and therefore acts as a measure of housing affordability as well as price changes. The increase was driven by house prices and the 30-year fixed-rate mortgage rate rising 4% and 1.4% YOY, respectively. The median existing-home sale price was $345,000, while the median house-buying power was just…

Rates Dip But Remain Elevated

Mortgage rates dipped again last week but remain above the dreaded 7% threshold. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.12%, down from 7.18%. A year ago at this time, the 30-year FRM averaged 5.89%. This is the second week of declines but the fourth straight week of 7%-plus rates. The 15-year fixed-rate mortgage slipped to 6.52% from 6.55%. A year ago, it averaged 5.16%. “The economy remains buoyant, which is encouraging for consumers. Though while inflation has decelerated, firmer economic data have put upward pressure on mortgage rates which, in the face of affordability challenges, are straining potential homebuyers,”  said Sam Khater, Freddie Mac’s Chief Economist.  The median U.S. home sale price is up…

One In Five Millennials Believe They Will Never Own A Home

Young Americans’ homebuying outlook just keeps getting worse. Almost one in five Millennials (18%) and 12% of Gen Z respondents to a Redfin survey believe they will never be able to own a home. They overwhelmingly see affordability as their primary barrier, with half citing high prices as their biggest concern. Just under half of respondents say they can’t save for a downpayment, coming in second. Notably, just over one-third directly blamed mortgage rates for the state of the market. Other concerns include paying off student loans and being able to make monthly mortgage payments. “The worsening housing affordability crisis has an outsized impact on Gen Zers and Millennials because they’re much less likely to own a home than older…