80% of Housing Markets Are Getting Better

The majority of the top 100 housing markets nationwide are improving compared to their historic benchmark range of housing activity, according to Freddie Mac’s Multi-Indicator Market Index.

The index measures the stability of the housing market by reflecting how single-family housing markets are performing to their long-term stable range based on home purchase applications, payment-to-income ratios (changes in home purchasing power based on home prices, mortgage rates, and household income), proportion of on-time mortgage payments, and local employment.

“The purchase applications indicator is up nearly 20 percent from last year and is reflected in the recent better-than-expected existing and new home sales purchase data,” says Len Kiefer, Freddie Mac’s deputy chief economist.

Source: Freddie Mac

July Marked a Big Month for Housing

The housing market heated up in July, with several factors favoring buyers this summer.

Jonathan Smoke, realtor.com®’s chief economist, says this summer one of the best in a decade: we’re seeing the highest consumer confidence for a July since 2007, we’ve also had the highest nominal home prices for a July on record, and we’ve had the lowest July mortgage rates on record.

“The good news for would-be buyers who have struggled to find a home or have been outbid in prior attempts is that the balance of power shifts a bit more in your favor in late summer and fall,” Smoke writes in his column at realtor.com®. “This is the time of the year when sales slow down, but inventory is at its peak. That means there are more homes for sale per buyer now, and yet mortgage rates remain close to their all-time lows. The window to enjoy the best summer in a decade for real estate remains open for the well-qualified and those ready to act.”

Source: “Finally, a July to Remember – and to Buy a Home,” realtor.com® (Aug. 4, 2016)

Homes Still Selling Fast Heading Into Fall

With home buyer demand starting to slow along seasonal trends, properties for sale are staying on the market slightly longer. For transactions that closed in July, the homes were typically on the market for 42 days, according to the latest REALTORS® Confidence Index. NAR notes that the number of days on market typically rises after June because of seasonal changes and an overall slowdown in the housing market heading into fall.

But with inventory still tight, properties are moving faster than they did a year ago — when they averaged 48 days on the market, according to NAR. In July, 43 percent of sold properties spent less than a month on the market.

Short sales are on the market for the longest time, at 135 days, while foreclosed properties are staying on the market an average of 49 days. Non-distressed properties averaged 41 days, according to NAR.

Source: “In What States Did Properties Sell Quickly in May-July 2015?” National Association of REALTORS® Economists’ Outlook blog (Sept. 1, 2015)

30-Year Mortgage Rates Remain Below 4%

For the fifth consecutive week, the 30-year fixed-rate mortgage has averaged below 4 percent, as home buyers and refinancers rush to lock in low rates.

“Housing markets have responded positively to low mortgage rates,” says Sean Becketti, chief economist at Freddie Mac. “The latest NAHB/Wells Fargo Housing Market Index for August 2015 was 61, the highest level in more than nine years. One-unit housing starts in July 2015 jumped to 782,000 units, up 12.8 percent from June and up 19 percent from last year. Overall housing markets remain on track for the best year since 2007.”

Freddie Mac reports the following national averages for the week ending Aug. 20:

  • 30-year fixed-rate mortgages: averaged 3.93 percent, with an average 0.6 point, dropping from last week’s 3.94 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
  • 15-year fixed-rate mortgages: averaged 3.15 percent, with an average 0.6 point, falling from last week’s 3.17 percent average. A year ago, 15-year rates averaged 3.23 percent.

Source: Freddie Mac

Contracts to Buy Homes Reaches 9-Year High!

Pending home sales continued to make gains last month, rising to the highest level since April 2006, according to the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings.

NAR’s Pending Home Sales Index rose 0.9 percent in May to 112.6 in May. The index is at its highest level since April 2006 when it was 113.7.

“The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring,” says Lawrence Yun, NAR’s chief economist. “It’s very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.”

“Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages,” says Yun. “Without meaningful gains in new and existing supply, there’s no question the goalpost will move further away for many renters wanting to become home owners.”

Source: National Association of REALTORS®

Things Are Looking Up for Housing!

Americans’ attitudes about the housing market are strengthening, according to Fannie Mae’s May 2015 National Housing Survey, a survey of about 1,000 consumers on their views about home ownership. This echoes recent forecasts that predict a pickup in housing activity for the year.

In the latest survey, more consumers reported an increase in household income, nearing an all-time survey high. The growth in wages falls in line with the recent positive jobs report that showed an increase in average hourly earnings. The percentage of consumers surveyed by Fannie Mae who say their household income is “significantly higher” than 12 months ago grew six percentage points to 28 percent over the past two months.

“Things are looking up for housing,” says Doug Duncan, senior vice president and chief economist at Fannie Mae, who notes the survey high of those who say it’s a good time to sell as well as the growing percentage of consumers who say their household income is significantly higher than last year. “We have found that these two indicators – good time to sell and income growth – are key drivers for the performance of the housing market. The increase in these indicators suggests our forecast of moderate improvement in the housing market in 2015 is on course and mirrors the near-term performance of other leading market data, including mortgage applications and pending home sales.”

Source: Fannie Mae

 

Spring Was Healthiest Market in 3 Years

July housing data shows that price appreciation and inventory increases during the peak home-buying season helped the market to post the largest spring gains in three years, realtor.com® reports in its National Housing Trend Report.

“In July 2012 and 2013, we saw external economic factors overwhelm the healthy gains established in the housing market during the spring home-buying season,” says Jonathan Smoke, chief economist for realtor.com®. “This year, we’re ending the traditional season with high buyer and seller confidence demonstrated by price appreciation, increases in inventory, and quick home sales.”

In July, housing inventories rose 2.3 percent year-over-year, as the median list price posted a 7.5 percent increase year-over-year, realtor.com® reports. The median list price was $214,900 nationwide in July.

“This is the first time since the beginning of the recovery that we expect to see positive momentum throughout the second half of the year,” Smoke says. “While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum.”

Source: realtor.com®