Loan Volume Stayed Steady Last Week, But Bad Times Lay Ahead

Mortgage loan application volume dipped just slightly last week, continuing a weeks-long trend of relative calm, according to the Mortgage Bankers Association’s weekly survey. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 0.1%. Mortgage rates jumped back up to 7.14% after cooling slightly. The adjusted purchase index rose 1%, while the unadjusted purchase index decreased by 1% and was 41% lower YOY.  “Mortgage rates edged higher last week following news that the Federal Reserve will continue raising short-term rates to combat high inflation. The 30-year fixed rate remained above 7% for the third consecutive week, and there were increases for most other loan types,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. …

Affordability Tumbled In September

Homebuyers saw affordability plunge in September as the typical monthly payment rose $102 from August. The national median payment applied for by applicants jumped to $1,941 from $1,839 in the month prior, the Mortgage Bankers Association reported. MBA’s Purchase Applications Payment Index fell for a second consecutive month, up 5.5% to a reading of 163.6.  PAPI measures monthly payments across time and relative to income, so this reading indicates that payments on new mortgages accounted for a smaller share of a typical person’s income. The increase reverses four months of improvement from an index high of 164.2 in May. “With mortgage rates continuing to rise, the purchasing power of borrowers is shrinking. The median loan amount in September was $305,550…

Price Growth Down To Slowest Pace Since 2011

The third quarter of 2022 brought the slowest quarterly price growth since Q4 2011, showing just how quickly home prices are changing as the market rebalances. Single-family home prices rose 13.8% YOY in Q3 2022, slowing from last quarter’s 19.1%, according to Fannie Mae’s Home Price Index. The Index measures average quarterly price change for all single-family U.S. properties except condos. Prices were up only 0.2% from Q2, their slowest quarter since 2011. “Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.  He added that many homeowners who might…

Austin Ranked #1 City For Remote Workers

Austin, TX, has been ranked the best city for working from home, leading a list full of Southern and Western metros. A new SmartAsset study looked at factors such as the number of remote workers, housing costs, and income taxes to determine what U.S. cities offer the most to work-from-homers. Remote work has risen in prevalence from around 5% in 2016 to 17.9% in 2021. In 13 cities, more than a third of the workforce is remote. Some employers are even using remote work as a bargaining chip to offer lower salaries while inflation is high. This type of work is changing how Americans view moving and shifting their priorities when searching for a new home. And it’s not going…

July Pending Home Sales Slip Slightly, Buoyed By Moderating Interest Rates

Following moderating mortgage rates, pending home sales slipped only slightly in July, down 1% from June. The National Association of Realtors’ Pending Home Sales Index posted a reading of 89.8 last month. A reading of 100 is equal to the level of contract activity in 2001. Pending sales were down 19.9% YOY, slipping from last month’s 20% YOY reading. It was the second consecutive month of decline and the eighth in the last nine months. “In terms of the current housing cycle, we may be at or close to the bottom in contract signings. This month’s very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at…

Home Sales Fall Nearly 20% YOY

Buyers are still fleeing the market in droves despite signs of cooling, driven out by rising mortgage rates and economic uncertainty. Home sales fell by 19.3% YOY in July, hitting their lowest level since the pandemic started, Redfin reported. It’s the biggest annual decline in U.S. home sales in more than a year. Sales also fell 4.1% from June. Redfin noted that while affordability challenges pushed some buyers out, others were concerned about the potential for home-value declines. Home price appreciation rose at its slowest pace since June 2020, up only 7.7%, and talk of price correction is everywhere. Fewer homeowners put their homes on the market, too. New listings fell 13.5% YOY, the biggest decline in more than a…

Rates Fall To 5.13%

Mortgage rates dropped to an average 5.13% last week from 5.22% the week prior, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey (PMMS) found that the 30-year fixed-rate mortgage (FRM) averaged 5.13%, following a rollercoaster couple of weeks that saw both a 30-point rate decrease and a 20-point increase. A year ago at this time, the 30-year FRM averaged 2.86%. “Inflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates that the housing market was experiencing earlier this year,” said Sam Khater, Freddie Mac’s Chief Economist. “The market continues to absorb the cumulative impact of the large price and rate increases that led to a plunge in affordability. As a result, over the rest…

“Rate Lock-In,” Falling Prices Push Sellers To Sidelines

New listings fell 12% during the four-week period ending August 7, the largest YOY decline since June 2020, according to recent Redfin data. Higher mortgage rates are keeping some Americans in their homes longer than they normally would be. Some homeowners are experiencing what Redfin calls “rate lock-in,” a fear of putting their home up for sale due to a low rate they nabbed during the pandemic. Others are realizing they won’t get an offer over listing price on-demand like they could last year. “Buyers are backing off due to rising housing costs and sellers are holding back because they realize they won’t get the bidding war they would have gotten six months ago,” said Redfin Deputy Chief Economist Taylor…

Housing Market Cooling To Feb 2020 Levels

Zonda’s New Home Pending Sales Index for June 2022 finds the housing market cooling to levels seen in February 2020. The New Home PSI posted a reading of 125.5 for June, down 7.5% YOY and 27.9% below cycle highs. It measures new home orders and average sales rate per community. New home sales dropped month-over-month by 0.2%, the fifth straight month of declines. The new home orders component fell 10.5% YOY, while the average sales rate per community component fell 8.2% YOY. “Home sellers and home buyers are adjusting to a new reality in the housing market,” said Ali Wolf, Zonda’s chief economist.  “Home sellers are quickly understanding the days of frenzied demand are behind us and it takes an…

What We Know About Zoomer’s Home Buying Preferences

Millennials are often touted as getting the short stick when it comes to the housing market.  Over the housing boom of the last two years, many Millennials who recently reached prime homebuying age started looking to buy their first home. But high competition and limited inventory have made this a notoriously difficult market for first-time buyers. This has been intensified by rising home prices. As of 2021, the average millennial with a mortgage owed $255,527 in mortgage debt, up 10% from the 2020 average and 16% from 2019. But while Millennials may be the largest buying cohort right now, Gen Z is right on their heels. Gen Z places much stock in the value of owning a home. Nearly 60%…