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…

Current Homeowners Optimistic About Buying A New Home In 2024

High rates and soaring prices are preventing many Americans from achieving the dream of homeownership, but current homeowners are optimistic about the housing market. TD Bank surveyed nearly 2,000 homeowners across the nation and found that a majority (67%) think buying a home is still attainable, while 38% plan to buy a new house in the next year. Millennial and Gen Z homeowners were the most optimistic about homebuying, regardless of the ongoing affordability crisis, lagging existing and new home sales, and 7% rates. “Although many of the challenges impacting homeownership are leaving some homeowners weary about the market, it’s great to see borrowers, especially younger generations, remaining steadfast in navigating the market to find a home that works for…

Homebuyers Slightly More Optimistic About Housing Market

Homebuyers were more hopeful about the housing market in June but still largely priced out of it. Fannie Mae’s Home Purchase Sentiment Index increased 3.2 points to a reading of 72.6 last month, pushing it closer to the plateau it set earlier in the year. Just under 20% of consumers indicated it’s a good time to buy a home, a significant jump from May’s survey low of 14%. The share who said it’s a good time to sell rose slightly, with more respondents saying they think home prices will increase further in the next 12 months. The data overall suggest little immediate change in housing market participation.  “A significant majority of consumers continue to tell us that it’s a ‘bad…

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…

VA Announces Fix For Home Loan Benefits After NAR Settlement

The Department of Veterans Affairs announced a temporary fix to a lending issue that arose from the National Association of Realtors $418 million settlement. Under the terms of the settlement, sellers are expected to negotiate with real estate professionals, and buyers have to enter into agreements with, and pay for, their own realtors. For some buyers, this may translate into a cheaper overall experience, depending on what is negotiated for as part of the sale. But this poses a unique problem for veterans, as VA loans limit certain fees that a buyer may pay, including real estate commissions. But this week, the VA addressed that problem. It announced that eligible Veterans, active-duty Service members, and surviving spouses who use the…

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…