Existing Home Sales Slipped In December

Existing-home sales dropped for the eleventh straight month in December, down 1.5% from November and 34% YOY, according to the latest data from the National Association of Realtors. Sales fell to a seasonally adjusted annual rate of 4.02 million from 4.09 million the month prior. Three of the four major regions saw declines month-over-month, though the West’s sales were unchanged from November. All four regions saw annual declines. “December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates,” said NAR Chief Economist Lawrence Yun.  “However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.” The 30-year fixed rate fell to 6.15% last week. Limited…

Rates Slide To 6.15%

The 30-year fixed rate continued to slip last week, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.15%, down from 6.33% the week prior. A year ago at this time, the 30-year FRM averaged 3.56 percent. The 15-year fixed-rate mortgage fell from 5.52% to 5.28%. A year ago, it averaged 2.79%. “As inflation continues to moderate, mortgage rates declined again this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern.” Housing construction slid in December to a five-month low. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, while…

Housing Starts Slid Again In December, But Builders Are Optimistic

Housing construction slid again in December to its lowest point since July, but an increase in single-family starts may signal improvement to come. Residential starts fell 1.4% from November to an annualized rate of 1.38 million, down 21.8% from the same time last year, according to data from the U.S. Census Bureau. This is the fourth consecutive decline for these data. It was driven largely by a dip in multifamily construction, which is volatile month to month. The picture for all of 2022 was fairly bleak. In the entire year, only 1 million homes were started, down 10.6% from 2021 and the largest drop since 2009. Permits for new homes fell 1.6% to a rate of 1.33 million. Single-family permits…

Purchase Loans See Double-Digit Boost

Mortgage loan application volume saw a double-digit increase last week as sinking rates led to a purchase demand rebound. The Mortgage Bankers Association’s weekly survey showed the adjusted Market Composite Index, a measure of mortgage loan application volume, jumped by 27.9%. Purchase demand increased at a seasonally adjusted rate of 25% and an unadjusted rate of 32%. Though it remains 35% below last year’s levels, the increase is good news for brokers whose businesses have been impacted by affordability issues and high rates. Mortgage rates fell to 6.23% last week. “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall,”  said Mike Fratantoni, MBA’s SVP and Chief…

Buyer Interest Creeps Up, But Sales Remain At Record Lows

The pace of home sales has declined to its slowest pace since the beginning of the pandemic, but buyers are slowly starting to search for homes again. According to a new report from Redfin, the typical home sold during the four weeks ending January 8 was on the market for 44 days, the longest period since April 2020. The slowdown resulted in the largest YOY inventory increase in Redfin’s data history. Pending home sales fell by 32% YOY to their lowest recorded level, while mortgage purchase applications dipped to their lowest point since 2014. But early signs of demand like online home searches and tour requests are increasing. Redfin’s Homebuyer Demand Index rose by 6% as buyers watch interest rates…

Rates Fall Again After New Year Increase

The 30-year fixed rate dipped last week after inching up in the first weeks of the new year, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.33%, down from 6.48% the week prior. A year ago at this time, the 30-year FRM averaged 3.45 percent. The 15-year fixed-rate mortgage fell from 5.73% to 5.52%. A year ago, it averaged 2.62%. “While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates,” said Sam Khater, Freddie Mac’s Chief Economist.  “Over the last few weeks latent demand has been on display with buyers jumping in and out of the…

Price Appreciation Cools To Single Digits

Home price growth cooled to the single digits for the first time in a year as both buyers and sellers continued to pull back from the market. The typical home cost $400,000, an annual increase of 8.4%, according to Realtor.com’s Monthly Housing Trends Report. While price appreciation remains elevated, it’s far lower now than its peak of 18% YOY earlier this year. The number of homes for sale was up 74.6% YOY, with 49 of the 50 largest metros seeing their inventory increase. That metric remained 38% lower than the December 2017-2019 average, however. Newly listed homes and pending listings both declined YOY.  Home sellers who are locked into low interest rates are hesitant to take on a more expensive…

Refis See Boost As Rates Slip Again

Mortgage loan application volume rose in the first week of 2023, boosted by a flurry of refinancing, according to the Mortgage Bankers Association’s weekly survey. The adjusted Market Composite Index, a measure of mortgage loan application volume, increased by 1.2%. Refinances saw the most improvement, up 5% from the week prior, as homeowners took advantage of the market’s reaction to indicators of a slowing economy. Data released last week showed the U.S. economy created fewer jobs in December, and hourly wages grew at the slowest annual pace in 16 months. Wage growth has fallen by a full percentage point since Q2 2022. As a result, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell from…

Rate Locks Set New Record Lows

Rate lock volumes took a beating in December as buyers and sellers remained on the sidelines. Black Knight’s December Originations Monitor Report found that typical seasonal patterns, together with continuing inflationary pressures and elevated rates, resulted in record lows for locks of all kinds. “Using Black Knight’s McDash mortgage performance data to provide comparative history, December saw the fewest purchase locks in a single month since early 2014, and the fewest overall rate locks on record dating back to January 2000 when Black Knight began reporting origination metrics,” said Kevin McMahon, president of Optimal Blue, a division of Black Knight. Rate lock dollar volumes fell by 19.4% in December, their lowest level in the five years Optimal Blue has tracked…

Consumer Sentiment Sees A Boost As Rates, Prices Moderate

Homebuyers are feeling slightly more optimistic about the market as mortgage rates ease. Fannie Mae’s Home Purchase Sentiment Index (HPSI) rose 3.7 points in December. Three of its six components improved from the month prior as more consumers said they expect rates and home prices to drop. After weeks of declines, rates inched up in the first week of 2023 but remain well below 7%. Economists at Freddie Mac expect them to fall further as inflationary pressures ease. But home purchase sentiment remains near its all-time low, set in October, and is down 13.2 points YOY. Only 21% of respondents believe it’s a good time to buy a home. And the possibility of additional rate hikes from the Federal Reserve…