New Home Sales Surged In May

New home sales jumped in May as homebuilders continue to experience a boom, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. Sales rose by 12.2% to a seasonally adjusted annual rate of 763,000, compared to April’s 680,000. They were up 20% from the same time last year, which saw an annualized rate of just 636,000. The seasonally‐adjusted estimate of new houses for sale was 428,000, down from last month and representing a supply of 6.7 months at the current sales rate. The median sales price for a new home was $416,300, while the average sales price was $487,300. Homebuilders are working overtime to accommodate surging demand. Americans still want to buy…

Existing Home Sales Ticked Up In May

Existing-home sales increased slightly in May, just enough to put a positive spin on the otherwise difficult market. Sales rose by 0.2%, barely moving, to a seasonally adjusted annual rate of 4.30 million from 4.28 million the month prior, according to the latest data from the National Association of Realtors. Year-over-year, sales are down 20.4%. The South and West saw improvement month-over-month, but the Northeast and Midwest fared poorly. “Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales,” said NAR Chief Economist Lawrence Yun. The median price for an existing dropped, down 3.1% to $396,100, NAR found. This is just the fourth YOY decline in years. February’s…

Mortgage Applications Just Barely Stay Positive

Mortgage applications just barely stayed positive last week, ticking up slightly. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – increased by 0.5%. Adjusted purchase applications rose by 2%, while the unadjusted index was down 0.1% from the week before and 32% lower YOY. The average interest rate for 30-year fixed loans fell for a third week from 6.77% to 6.73%. Though it’s not a huge drop, any dip will pull some rate-sensitive buyers off the sidelines. This is especially true for new construction, which is having a boom moment thanks to the crippling shortage of existing homes for sale. “Purchase applications increased, driven by a 2% gain…

Just 6% Of Potential Buyers Plan To Purchase This Summer

With affordability at its worst level in more than three decades, most Americans are putting off buying a home until rates fall. Only 6% of Americans interested in buying a home are planning to do so this summer, with the majority waiting for interest rates to drop, according to BMO’s Real Financial Progress Index. Just 4% say they expect to buy in the fall. High rates, low inventory, and sky-high house prices are keeping potential buyers on the sidelines. Of those who don’t currently own a property, 65% are holding off due to the state of the economy. In the current high-rate environment, affordability is an insurmountable challenge for many buyers. As of May, each of the 100 largest U.S.…

Homebuyers Are Unhappy With Their Homes, Buying Experience

Millions of Americans who bought new homes during the pandemic have enjoyed them and the benefits of historically low interest rates. But for those who missed out, the homebuying process has become a drag. A new survey from Clever Real Estate found more than half of Americans who recently bought a home feel that they overpaid for their home and have struggled financially since. One thousand Americans who purchased a home in 2022 or 2023 were surveyed on April 12 and 13, 2023. Respondents answered up to 21 questions regarding their recent home purchase, previous home sales, and views on buying and selling homes. Almost half of respondents exceeded their budget and 58% believe they overpaid. Considering that, it’s no…

Purchase Apps Fall To Slowest Pace In A Month

Mortgage applications fell last week, wiping out the prior week’s gains, as purchase applications dropped to their slowest pace in a month. The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 6.3%, changing course after last week’s 6.3% increase. Adjusted purchase applications fell by 4.8%, while the unadjusted index was down 5% from the week before and 26% lower YOY. The average interest rate for 30-year fixed loans rose from 6.48% to 6.57%, its highest level in two months. Refinances fell 8% from the week prior after a 10% increase last week. They remain 43% lower than the same time last year, comprising only 27.4% of…

Prices Climb In Q1 As Demand For Budget-Friendly Homes Heats Up

Home sale prices went up last quarter due to high competition in budget-friendly markets. The National Association of Realtors’ latest quarterly report found that single-family existing-home sales prices increased in 152 of 221 metros — about 70% — in Q1 2023.  The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $1,859, up 33% YOY. The divide in demand between affordable and expensive markets is the main factor in these numbers. High-end markets with the most expensive homes are seeing declines, while cheaper areas are seeing intense competition for the few affordable homes for sale, pushing prices up. “Generally speaking, home prices are lower in expensive markets and higher in affordable markets, implying greater…

Consumers Are Gaining Confidence That The Housing Market Will Turn In Their Favor

Consumers are becoming more optimistic that the housing market will turn in their favor in the coming year, though affordability concerns continue to weigh them down. Fannie Mae’s Home Purchase Sentiment Index (HPSI) jumped to its highest level since May 2022 in April, up 5.5 points to 66.8. This is the largest increase in more than two years. Every component increased month-over-month as consumers start to see the light at the end of the tunnel for their homebuying struggles. As the market is still seized by affordability concerns, the components remained negative, with the full index down 1.7 points YOY. However, more respondents say they expect the tide to turn in their favor. The component associated with mortgage rate expectations…

Home Prices Moderated In February

Data released today shows a modest increase in home prices took place in February. Year-over-year, prices increased by 2%, down from 3.7% in the previous month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. The 20-City Composite posted a 0.4% year-over-year gain, down from 2.6% in the previous month. “February’s results were most interesting because of their stark regional differences… It’s unsurprising that the Southeast (+7.8%) remains the country’s strongest region, while the West (-4.2%) continues as the weakest,” noted Craig J. Lazzara, Managing Director at S&P DJI. West Coast hubs that saw huge migration during the pandemic remained negative YOY in February, with San Francisco, Seattle, San Diego, and Portland all experiencing declines. Southern cities continued…

Rate Locks Exploded In March

Home shoppers following rates closely jumped on retreating rates in March, giving the spring buying season a boost. Black Knight’s March 2023 Originations Monitor showed that rate lock dollar volume exploded in March, up 43%, as rates retreated due to economic uncertainty. Lock volumes rose in all categories. Purchase locks were up 44% month-over-month, significantly higher than its average of 30% across the last five years. “This continues to be an incredibly rate-sensitive housing market, and March’s rate lock activity perfectly illustrates this dynamic,” said Andy Walden, vice president of enterprise research at Black Knight.  He explained that rates were inching up at the beginning of the month, but came down later in March due to banking sector turmoil. “The…