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…
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…
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…
As the average 30-year fixed-rate mortgage rate rose to 6.48% from 6.42% in the last week of 2022, mortgage applications sunk to a 25-year low, according to officials at Freddie Mac. “Mortgage application activity sunk to a quarter-century low this week as high mortgage rates continue to weaken the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.” Khater continued, “Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market. Moreover, if rates continue…
Minutes from the December meeting of the Federal Reserve Board and the Federal Open Market Committee were released this week, and they show Fed members still focused on fighting inflation, not lowering interest rates. (The full minutes can be found here.) “Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2%, which was likely to take some time,” according to the summary of the meeting. “In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy.” While the December rate hike of 50 basis points was smaller than the…
Home sales plummeted by 35% in November but there are early signs that demand may be picking up. Redfin’s latest data found that home sales dropped 35.1% YOY in November on a seasonally-adjusted basis. High buying costs kept both buyers and sellers on the sidelines. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes,” Sam Khater, Freddie Mac’s Chief Economist, noted. “Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below four percent.” Sellers have hesitated to put their homes on the market, knowing they’ll have to buy a new…
The 30-year fixed rate dipped again last week, though the 15-year inched up, breaking a downward streak, Freddie Mac reported Thursday. Freddie’s Primary Mortgage Market Survey found that the 30-year fixed-rate mortgage averaged 6.27%, down from 6.31% the week prior. A year ago at this time, the 30-year FRM averaged 3.05 percent. The 15-year fixed-rate mortgage rose from 5.54% to 5.69%. A year ago, it averaged 2.30%. Most Americans opt for a 30-year FRM. In 2018, lenders wrote 22 times more 30-year notes than 15-year notes, according to a NerdWallet analysis. Last week’s rate increase will likely affect only a small portion of potential buyers who make enough money to afford larger monthly payments. “Heading into the holidays, mortgage rates…
Mortgage loan application volume rose again, with refinances up 6% as interest rates hit a three-month low, according to the Mortgage Bankers Association’s weekly survey. Refinances remain 85% lower than the same time last year, however, comprising 31.3% of total applications. Purchases took a hit with the adjusted purchase and unadjusted purchase indices down by 0.1% and 3%, respectively. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell from 6.42% to 6.34%, its lowest point since September. Despite that, the adjusted Market Composite Index, a measure of mortgage loan application volume, increased by just 0.9%. “This is a particularly slow time of year for homebuying, so it is not surprising that purchase applications did not…
Guild Mortgage is rolling out a new rate buydown program, the company announced in a press release. The program, Payment Advantage, applies to any borrower locking in a conventional mortgage. Guild will then pay 1% of the borrower’s interest rate for one year. The borrower’s monthly payment will increase after that period, but they may then be eligible to refinance. The program is available until March 31, 2023. “Freddie Mac reported that the average commitment interest rate for a 30-year, conventional, fixed-rate mortgage was 6.90% in October, more than double the rate of 2.96% across all of 2021,” said Guild CEO Mary Ann McGarry. “With the rising costs of loans in today’s increasingly competitive housing market, we want to continue…
Homebuyers are finally starting to see some moderation in prices as the market corrects. The cost of a new mortgage fell 4.8% in November as mortgage rates plunged, according to Zillow’s latest Market Report. This is only the second time mortgage costs have declined in the past 19 months. Falling home values and shrinking mortgage rates forced prices to cool. Rates dropped 57 basis points in November alone. The typical U.S. home saw its value shrink 0.2% from October to November, and is down 0.5% from a peak in June. Renters also reaped the benefits of declining values, with rents seeing their largest single-month drop in the seven-year history of Zillow’s data. Affordability remains a challenge. Monthly mortgage costs are…
