Real House Prices Up 10.5% In September, But Many Markets Are Cooling

Real house prices jumped 10.5% in September and logged a 60.6% YOY increase, according to First American’s Real House Price Index. As a result, consumer buying power, or how much a person can buy based on changes in income and interest rates, fell by 8.9% month-over-month and 29.3% YOY. The significant dip in affordability measured here results from skyrocketing home prices and rapidly increasing mortgage rates. “Even though household income increased 3.1% since September 2021 and boosted consumer house-buying power, it was not enough to offset the affordability loss from higher mortgage rates and fast-rising nominal prices,” said Mark Fleming, chief economist at First American. Florida, Georgia, Arkansas, South Carolina, and Alabama saw the largest annual increases in real house…

Loan Apps Hit Lowest Point Since 1997

Mortgage loan application volume has now seen four months of decline and fallen to its lowest level since 1997, according to the Mortgage Bankers Association’s weekly survey. Interest rates rose to 6.94%, their highest point since 2002. The adjusted Market Composite Index, a measure of mortgage loan application volume, dropped by 4.5%. The adjusted purchase index fell 4%, while the unadjusted purchase index decreased 3% and was 38% lower YOY. The refinance index dropped by 7% and was 86% lower than at the same time last year. Refis made up 28.3% of total applications. “The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market. Residential…

Housing Market Cooling In Some Parts Of The Country After A Wild Pandemic Ride

By TYRONE TOWNSEND As the spring selling season continues, those in the industry are noticing that the housing market in parts of the country is beginning to cool after a wild ride during the pandemic. Bidding wars and all-cash bids were prevalent due to rising housing prices and low availability. As more investors invaded the market, millions of average Americans were left on the sidelines, unable to compete. The housing market is already beginning to cool but despite this fact, respite for homeowners – particularly first-time purchasers – is unlikely as the Federal Reserve continues to boost interest rates to battle inflation, driving up mortgage rates. According to Realtor.com’s Monthly Home Trends Report, housing inventory in the United States was…

Will The Housing Market Boom Or Bust In 2022?

By KIMBERLEY HAAS As the spring selling season begins, people in the mortgage and real estate industries are speculating on whether 2022 will be a year of growth or the start of the end for a red-hot market that has favored sellers and forced up the price of housing in many parts of the country. Numbers from the start of the year look promising for growth. On Tuesday, S&P Dow Jones Indices released the latest results for the S&P CoreLogic Case-Shiller Indices. A 19.2% annual gain was reported in January, up from 18.9% in December. The 10-City Composite annual increase was 17.5%, up from 17.1% in December. The 20-City Composite posted a 19.1% year-over-year gain, up from 18.6% in the previous…

Home Prices Are Up But Remain Far Below April 2006 Peak

Homes are less affordable than they were a year ago, but they largely remain more affordable than at the peak of the 2006 housing boom, according to First American Financial Corporation’s Real House Price Index. In January, the RHPI rose 27% from the year prior, making it the fastest-growing RHPI – and fastest YOY decline in affordability – since 2004. This was driven by a 21.7% increase in home prices and a 0.7% rise in rates. The RHPI measures price changes for single-family properties adjusted for the impact of income and interest rate changes on consumer house-buying power. As such, it also serves as a measure of affordability. Household income was up 5% from January 2021, but that gain was…

Newly Built Home Share Hits Record-High

More than a third of US single-family homes for sale in December were newly built, the highest share on record, according to a new Redfin report. New construction accounted for 34.1% of single-family homes at the end of 2021, up from 25.4% year-over-year (YOY). These numbers are the result of builders trying to keep up with housing demand, which has increased while inventory dropped to historic lows. In December, existing-home inventory fell 14.2% YOY with a historic-low 1.8 months supply. However, new homes saw inventory increase 34.8% and had a 6 month supply. Though new home supply is rising, new home sales have remained consistent, which Redfin calls “another indicator that homebuyer demand is far outpacing supply.” “A lot of…