Downsizers: ‘Biggest Regrets’

Homeowners who opt to downsize into a smaller place say that saving money was their chief motivator, along with having to manage less space after the children have moved out. But some home buyers could have downsizing regret as they transition into a smaller home.

Homes.com surveyed more than 1,000 consumers who have downsized their homes. They found that those who downsized did tend to spend 62% less than the house they owned prior. However, many downsizers still weren’t happy.

Interesting data at source: “The Upside to Downsizing,” Homes.com (2020)

New Home Loan Limits Take Effect

The Federal Housing Finance Agency’s new loan limits for 2020 have gone into effect; Fannie Mae and Freddie Mac, which are operated by the FHFA, began backing larger loans last week when the new year started. The cap on Fannie and Freddie loans has increased to $510,400 from 2019’s $484,350 limit.

View a breakdown of loan limits by county for Fannie and Freddie.

The Federal Housing Administration also increased its loan limit to $331,760, which is a $17,000 increase from 2019. In about 70 designated high-cost counties, the FHA’s 2020 loan limit has climbed to $765,600, a $40,000 increase from 2019. Alaska, Hawaii, Guam, and the U.S. Virgin Islands have higher limit ceilings than the rest of the country, the FHA says. Those areas have a 2020 FHA loan limit of $1,148,400.

View a breakdown of loan limits by county for the FHA.

Source: “FHA, Fannie Mae, Freddie Mac Are All Now Backing Larger Loans,” HousingWire (Jan. 2, 2020)

January Expected to Be ‘Hot for Home Shoppers’

The busy home-shopping season will start early in January this year, according to forecasters. The month of January in recent years has tended to have the second-most listing views across the year (just 1% below February), according to realtor.com® data.

With sub-4% mortgage rates, low unemployment, and higher wages, industry insiders are expecting a bustling winter real estate season.

Source: “New Analysis: January Home Shopping Is Getting More Popular,” The Mortgage Reports (Dec. 31, 2019)

Average Credit Scores Surge

Americans are boosting their credit scores, which bodes well for applicants seeking a mortgage to snag the lowest rates. The average credit score hit its highest level since 2011, reaching 682–two points higher than a year ago, Experian reports in its State of Credit report. Consumers also are taking on more mortgage debt than a year ago, and delinquency rates are decreasing too.

Comparing borrowing behaviors between genders, women’s average credit scores are four points higher than men’s (686 vs. 682, respectively). Men tend to carry more mortgage debt than women–$220,421 compared to $203,603.

By generation, Gen Xers, millennials, and Gen Zers tend to carry more debt than older generations. They also tend to have higher delinquency rates, the Experian study shows. A breakdown showing their average credit scores and mortgage debts is detailed at: Experian

Home Flipping Is Losing Fans

Home flipping plunged 12.9% in the third quarter of this year, following an unusually active spring, according to ATTOM Data Solutions’ latest U.S. Home Flipping Report. In the third quarter, 56,566 single-family homes and condos were flipped, down 6.8% from a year ago. This marks the largest quarterly and annual drops in home flipping activity since the third quarter of 2014.

“After a springtime selling binge earlier this year, the home flipping business settled way down over the summer amid a continuing scenario of languishing profits,” says Todd Teta, chief product officer at ATTOM Data Solutions. “The retreat back to more normal levels of sales comes amid broader market forces that are making it harder and harder for investors to complete the kind of deals they were getting as recently as last year. Those forces are keeping profits way down from postrecession highs and show no signs of easing.”

Source: ATTOM Data Solutions

Specialty Rooms Are in Demand

home shoppers—particularly millennials—are ranking specialty rooms high on their priority list during their search. These rooms include laundry rooms, home offices, mud rooms, sun rooms, and more. The National Association of Home Builders surveyed buyers to find which of these rooms rank highest on their lists. The NAHB considers specialty rooms anything except bedrooms, bathrooms, or the kitchen—or what’s considered the essentials in a home.

Millennials also showed a strong preference for an exercise room (with 57% wanting one). But that preference tended to wane with age. For comparison, 50% of Gen Xers said they wanted an exercise room, 32% of baby boomers, and only 17% of seniors. Millennials also expressed an interest in media and game rooms and two-story entry foyers, more so than other age groups.

Source: “Specialty Rooms Wanted by Millennial Home Buyers,” National Association of Home Builders’ Eye on Housing blog (Dec. 5, 2019)

Mortgage Rates Stay Steady

“This week the economy sent mixed signals, leaving mortgage rates unchanged,” says Sam Khater, Freddie Mac’s chief economist. “Survey data for manufacturing and service industries varied while construction spending fell modestly. However, homebuyer demand continued to improve, rising eight percent. Clearly, home buyers remain bullish on the real estate market.”

Freddie Mac reports the following national averages for the week ending Dec. 5:

  • 30-year fixed-rate mortgages: averaged 3.68%, with an average 0.5 point, holding the same as last week. Last week at this time, 30-year rates averaged 4.75%.
  • 15-year fixed-rate mortgages: averaged 3.14%, with an average 0.4 point, falling slightly from last week’s 3.15% average. A year ago, they averaged 4.21%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.39%, with an average 0.4 point, falling from last week’s 3.43% average. A year ago, they averaged 4.07%.
Source: Freddie Mac

Drop in Mortgage Rates = Higher Home Buying Demand

Mortgage rates declined this week, After several weeks of increases, the drop in mortgage rates is a welcome sign for home buyers.

The housing market continues to steadily gain momentum with rising homebuyer demand and increased construction due to the strong job market, ebullient market sentiment, and low mortgage rates,” says Sam Khater, Freddie Mac’s chief economist. “Residential real estate accounts for one-sixth of the economy, and the improving real estate market will support economic growth heading into next year.”

Freddie Mac reports the following national averages for the week ending Nov. 21:

  • 30-year fixed-rate mortgages: averaged 3.66%, with an average 0.6 point, falling from last week’s 3.75% average. Last year at this time, they averaged 4.81%.
  • 15-year fixed-rate mortgages: averaged 3.15%, with an average 0.5 point, falling from last week’s 3.20% average. A year ago, 15-year rates averaged 4.24%.
Source: Freddie Mac

Home Loan Interest Rates Rise

“The modest uptick in mortgage rates over the last two months reflects declining recession fears and a more sanguine outlook for the global economy,” says Sam Khater, Freddie Mac’s chief economist. “Due to the improved economic outlook, purchase mortgage applications rose fifteen percent over the same week a year ago, the second highest weekly increase in the last two years. Given the important role residential real estate plays in the economy, the steady improvement of the housing market is a reassuring sign that the economy is on solid ground heading into next year.”

Freddie Mac reports the following national averages for the week ending Nov. 14:

  • 30-year fixed-rate mortgages: averaged 3.75%, with an average 0.6 point, rising from last week’s 3.69% average. Last year at this time, they averaged 4.94%.
  • 15-year fixed-rate mortgages: averaged 3.2%, with an average 0.5 point, rising rom last week’s 3.13% average. A year ago, 15-year rates averaged 4.36%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.44%, with an average 0.4 point, rising from last week’s 3.39% average. A year ago, they averaged 4.14%.
Source: Freddie Mac

“I Want to Buy a Home” Report

Many non-owners—those renting or living with someone else—are eager to buy a home. But their current financial situation is what is mostly holding them back.

The newly released “2019 Profile of Buyers and Sellers” report contained a new section this year, including a survey about non-owners and their views on home ownership. NAR released the report during the 2019 REALTORS® Conference & Expo in San Francisco this week.

But the main reason they aren’t buying yet is because they can’t afford to make the jump into ownership. “Making the largest financial purchase in one’s life relies on the financial strength to do so,” the report notes. Seventy-five percent of non-owners surveyed say they believe home ownership is part of the American dream. Eighty-one percent of non-owners say they want to own a home in the future.

Source: National Association of REALTORS®’