Mom-And-Pop Investors Take Over The Market

Institutional investors are cooling on the housing market, putting cash purchases on the back burner where they used to dominate. The share of investors buying homes with cash fell to 64% in Q1 2024, Realtor.com found, its lowest point since 2008 and down from 69.7% in Q4 202. The reason? Mom-and-pop investors are increasing their market share. Small investors (those that purchased ten or fewer homes since 2001) made up 62.6% of investor purchases from January to March 2024. That’s the highest share since 2001, when Realtor.com began collecting this data. Small investors are far more likely to use financing– a boon for homebuyers hoping to outbid them and mortgage lenders alike. “It’s better for everyone involved that institutional money…

Zoomers, Millennials Prefer Suburbs To Urban Living

Urban living is taking a back seat to spacious suburbs for both parent-aged Millennials and affordability-minded Zoomers. A recent report from StorageCafe found that housing markets in exurbs and suburbs grew faster than in principal cities over the last decade, so fast that typical life changes in the largest homebuying cohort, Millennials, can’t account for it altogether. For Millennials, city living no longer makes sense. Many are in their homebuying and parenting years, making spacious suburban houses with plentiful outdoor areas important. The rise of remote work means many don’t have to sacrifice the perks of raising a family outside the city in order to be close to work, making these areas more appealing. For Gen Z, however, the reason…

Pending Home Sales Fall To Record Low

Pending home sales unexpectedly fell in May, hitting an all-time low. NAR’s Pending Home Sales Index fell by 2.1% month-over-month to a reading of 70.8 last month, its lowest level on record. An index of 100 is equal to the level of contract activity in 2001. Year-over-year, sales were down 6.6%. The drop came as a surprise, as economists surveyed by Bloomberg had predicted a 0.5% gain. All four regions posted YOY declines. On a monthly basis, however, the Midwest and South saw transactions fall, while the Northeast and West recorded gains. NAR Chief Economist Lawrence Yun painted an optimistic picture despite the data, noting that home prices should ease in the coming months, giving homebuyers struggling with affordability some…

Mortgage Applications Barely Budge Despite Rates Falling To A Three-Month Low

Mortgage applications inched up last week, moving just slightly despite rates falling to a three-month low. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — increased by 0.8%, adding to last week’s 0.9% bump. The results include an adjustment for the Juneteenth holiday. Adjusted purchase applications increased by 1%, while the unadjusted index was down 10% and 13% lower YOY. The boost was small despite rates falling to their lowest level in three months, 6.93%. “Lower rates, however, were still not enough to entice refinance borrowers back, as most continue to hold mortgages with considerably lower rates,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.…

Existing-Home Sales Down As Sales Prices Hit Record High

Existing-home sales dipped again in May as the median sales price hit a record high. Existing sales fell by 0.7% last month to a seasonally adjusted annual rate of 4.11 million, according to the National Association of Realtors. They were down 2.8% YOY. This was the worst May data since 2020 but in line with estimates from analysts surveyed by Bloomberg. The median existing sales price rose 5.8% YOY to $419,300, the eleventh consecutive month of annual price gains and the highest price ever recorded by NAR. At the same time, the inventory of unsold existing homes increased by 6.7% from the month prior to 1.28 million, the equivalent of 3.7 months’ supply at the current monthly sales pace. Annually,…

Existing-Home Sales Stifled By Lack Of Inventory, Unaffordability

Existing-home sales continue to be stifled by “twin” market dynamics, and First American expects them to slow through the month. The company’s Existing-Home Sales Outlook “nowcasts” sales based on the historical relationship between sales, demographic trends, house-buying power, and the prevailing financial and economic conditions. For May, the company expects to see sales down YOY and even with April. “For the remainder of 2024, existing-home sales may increase slightly over last year, especially if mortgage rates fall and inventory continues to rise. However, without a boost in affordability and more existing-home inventory any sales momentum is likely to stall,” deputy chief economist Odeta Kushi wrote in the report. “Double-edged” rates are now keeping the cost of homeownership high, and elevated…

Residential Lending Sinks To Lowest Point Since 2000

Residential lending is down in two-thirds of the U.S. and sitting at its lowest level since 2000. That’s according to new data from ATTOM, which showed that 1.28 million mortgages secured by residential property were issued in Q1, a 6.8% decline from the previous quarter. It’s the 11th decline in the last 12 quarters and the lowest level in 24 years. Total lending activity is down 4.8% YOY and 69.3% from its high point in 2021. The declines impacted purchase, refi, and home equity lending activity. Purchase loan activity, in particular, was down nearly 10%, while home equity fell by 9%. Refinances, which were already constrained, saw just a 1.9% decrease. The first quarter soured many analysts’ hopes for a…

Americans Are Nervous About Buying Homes, But Still Want To

Americans are nervous about buying homes in a difficult housing market but still consider it an important milestone. That’s according to a new survey conducted by The Harris Poll on behalf of homebuilder KB Home. As National Homeownership Month begins, the company sought to understand buyers’ mindsets in the current market. The survey revealed that 4 in 5 adults believe owning a home is an important aspect of their lives. Forty percent of respondents, especially Zoomers (62%) and Millennials (55%), said they think about buying a home at least once a week. The benefits they cited included privacy, long-term financial benefits, and a “place to make memories.” But many struggle to understand the process and associate the homeownership journey with…

Rates Dip Below 7%

Average mortgage rates dipped below 7% last week, giving buyers some breathing room as they navigate a high-priced housing market. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.94%, down from the week prior’s 7.02%. A year ago at this time, the 30-year FRM averaged 6.57%. The 15-year also fell, down from last week’s 6.24% to 6.38%. A year ago at this time it was 5.97%. “Spring homebuyers received an unexpected windfall this week, as mortgage rates fell below the 7% threshold for the first time in over a month,” said Sam Khater, Freddie Mac’s Chief Economist. “Although this week’s data on previously owned home sales showed a decline, total inventory of both new and existing…

Cooling Rates Boosts Refis Again

Mortgage applications rose again as rates slipped for a third week and refis rallied. The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — rose by 1.9%, adding to last week’s 0.5% increase. Adjusted purchase applications declined, however, by 1%, while the unadjusted index was down 2% and 11% lower YOY. Refinances once again drove the rising data this week. Rates declined to 7.01%, their lowest level in seven weeks. “Rates coming down from recent highs spurred some borrowers to act, with increases across both conventional and government refinance applications. VA refinances had a double-digit increase for the third consecutive week, although the current level of refinancing is…