A newly unveiled forward-looking housing index by Nationwide says the U.S. housing market is at its healthiest level since 2001. The Health of Housing Markets Report will analyze the housing health outlook on a quarterly basis throughout 373 metro areas.
The index’s current leading indicator score for the fourth quarter of 2014, was 109.8, the highest level in the 15 years of data already examined by the study’s authors. A reading of more than 100 suggests the national housing market is healthy and shows few signs of a housing downturn over the next year. The report considers employment, demographics, the mortgage market, and house prices to determine the health of each market.
“The HoHM Report provides a look into the future instead of the rear view mirror,” says David Berson, Nationwide’s chief economist and senior vice president. “The quarterly report should serve as a resource to gauge how healthy housing markets are today but, perhaps more important, what to expect in the future and why.”
More details at: Nationwide Health of Housing Markets Report
More Americans are staying put and renovating their homes this year. Nearly 28 million or 12 percent plan to move, down from 16 percent last year, according to the American Express Spending & Saving Tracker, a survey of more than 1,800 adults.
One reason why some are staying put this year is the majority view the housing market as a “buyer’s market.” Thirty-seven percent of those surveyed view the current market as a “buyer’s market,” compared to 25 percent who called it a “seller’s market.”
For those who do not plan to move this year, many owners are planning to renovate instead, with home renovation projects that are expected to average $4,100 this year.
Where are most Americans drawing their renovation inspiration? Home design TV shows, finds the survey. Thirty-seven percent of adults surveyed say that home design TV shows provide their biggest source of inspiration for home improvement projects, followed by online magazines, do-it-yourself-themed blogs, and social media.
Source: American Express Spending & Saving Tracker
For the second consecutive week, mortgage rates continued to fall, with the 30-year fixed-rate mortgage still well below 4 percent and 15-year rates dipping below 3 percent, Freddie Mac reports in its weekly mortgage market survey.
“Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability,” says Len Kiefer, deputy chief economist at Freddie Mac.
Freddie Mac reports the following national averages for the week ending March 26:
- 30-year fixed-rate mortgages: averaged 3.69 percent, with an average 0.6 point, dropping from last week’s 3.78 percent average. Last year at this time, 30-year fixed-rates averaged 4.40 percent.
- 15-year fixed-rate mortgages: averaged 2.97 percent, with an average 0.6 point, dropping from last week’s 3.06 percent average. A year ago, 15-rates averaged 3.42 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.4 point, dropping from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.10 percent
Source: Freddie Mac
Existing-home sales increased modestly in February, but constrained inventory levels pushed price growth to its fastest pace in a year, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.2 percent to a seasonally adjusted annual rate of 4.88 million in February from 4.82 million in January. Sales are 4.7 percent higher than a year ago and above year-over-year totals for the fifth consecutive month.
The median existing-home price2 for all housing types in February was $202,600, which is 7.5 percent above February 2014. This marks the 36th consecutive month of year-over-year price gains and the largest since last February (8.8 percent).
Lawrence Yun, NAR chief economist, says although February sales showed modest improvement, there’s been some stagnation in the market in recent months. “Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” he said. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.”
Before becoming home owners, some buyers are undergoing counseling first. A new survey shows a rising number of Americans are taking housing counseling courses, which could be a sign that more educated, prepared first-time buyers are ready to step off the sidelines in the coming months.
More than 73,000 people received housing counseling from the National Foundation for Credit Counseling member agencies during 2014, the highest in past five years.
Housing counseling may help some buyers even save money by learning the process, McClary says. A recent Consumer Financial Protection Bureau survey showed that 47 percent of home buyers do not compare lenders when shopping for a mortgage – which means they may not be getting the best rates. Potential buyers who undergo housing counseling are more likely to review multiple mortgage offers and find possible savings.
Source: “New Trend Shows Positive Signs for Homebuyers,” RISMedia (March 16, 2015)
The 30-year fixed-rate mortgage continues to average below 4 percent – a positive sign launching into the spring home-buying season, Freddie Mac reports in its weekly mortgage market survey. Average fixed-rate mortgages moved down this week. Freddie Mac reports the following national averages for the week ending March 19:
- 30-year fixed-rate mortgages: averaged 3.78 percent, with an average 0.6 point, dropping from last week’s 3.86 percent average. Last year at this time, 30-year rates averaged 4.32 percent.
- 15-year fixed-rate mortgages: averaged 3.06 percent, with an average 0.6 point, dropping from last week’s 3.10 percent average. A year ago, 15-year rates averaged 3.32 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, dropping from last week’s 3.01 percent average. Last year at this time, 5-year ARMs averaged 3.02 percent.
Source: Freddie Mac
Freddie Mac will begin offering mortgages with down payments of only 3 percent — the first time they’ve been this low on the GSE’s loans in nearly five years — starting March 23. The move is expected to make more credit available to entry-level borrowers.
“By launching our 3 percent down payment mortgage now, at the start of the spring homebuying season, lenders will be ready to serve qualified working families who are ready to buy and keep the recovery going,” Dave Lowman, executive vice president for Freddie Mac’s single-family business, writes on its Executive Perspectives blog.
Besides 3 percent down payments, Freddie Mac’s Our Home Possible Advantage Program, which is aimed at supporting first-time buyers as well as low- and moderate-income borrowers, is allowing no minimum from borrowers in contributions. That means parents or relatives now can cover 100 percent of the down payment through gifts.
Source: “Advantage: Home Buyers,” Freddie Mac (March 9, 2015)
In 2013, 31 percent of 18- to 34-year-olds still lived with their parents. Prior to the housing crisis, however, that percentage stood at 27 percent. If the number of 18- to 34-year-olds who live with their parents returns to pre-recession levels over the next five years that could mean an extra 400,000 young adults leaving home each year.
“[A] normalization in the share of young adults living with their parents looks set to provide a boost to household formation, underpinning the recovery in housing starts,” says Ed Stansfield, chief property economist for Capital Economics. “But unless it is also accompanied by a marked loosening in lending criteria it is unlikely to trigger a new house price boom, as house price growth will be constrained by income growth.”
“The U.S. economy is now growing strongly, with real incomes rising rapidly and mortgage credit conditions loosening,” says Stansfield. “That means more young adults will have the means to strike out on their own.”
Source: “Is Household Formation Set for a Rebound?” HousingWire (March 12, 2015)
Mortgage rates inched upward this week, with fixed-rate mortgages returning to averages at the start of the year, Freddie Mac reports in its weekly mortgage market survey.
Still, the 30-year fixed-rate mortgage continues to average below 4 percent, a threshold it has remained below since the week ending Nov. 13, 2014, Freddie Mac reports.
Freddie Mac reports the following national averages for the week ending March 12:
- 30-year fixed-rate mortgages: averaged 3.86 percent, with an average 0.6 point, rising from last week’s 3.75 percent average. Last year at this time, 30-year fixed-rate mortgages averaged 4.37 percent.
- 15-year fixed-rate mortgages: averaged 3.10 percent, with an average 0.6 point, rising from last week’s 3.03 percent average. A year ago, 15-year rates averaged 3.38 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 3.01 percent, with an average 0.5 point, rising from last week’s 2.96 percent average. Last year at this time, 5-year ARMs averaged 3.09 percent.
Source: Freddie Mac
Even the slightest movement in mortgage rates can translate into more – or less – purchasing power for home buyers.
John Burns Real Estate Consulting recently looked at how the fluctuation in rates effects the average consumer. The firm found that a typical family earning $60,000 a year could afford around $1,800 month for the mortgage payment.
In 2000, a 30-year fixed-rate loan, which averaged an 8 percent mortgage rate, would have qualified that family for a $245,000 loan.
But at a 4 percent mortgage rate – which current rates are averaging – that same family can qualify for a $377,000 loan.
“In other words, each 1 percent drop in interest rates in the last 15 years has allowed home sellers to raise the price 12 percent,” according to Jon Burns analysis.
Source: “How Tiny Mortgage Rate Moves Can Buy You a Lot,” CNBC (March 10, 2015)