Home Buying Archives - Page 2 of 8 - Equity Source Mortgage

Home Borrowing, Applications, Refinance

April 07, 2021

Home borrowing costs inched higher in the latest week and remain at historically low levels. The MBA reports that the 30-year fixed-rate mortgage rose three basis points to 3.36% with 0.43 in points for the week ended April 2, 2021. The Market Composite Index, a measure of total mortgage loan application volume fell 5.1% while the Purchase Index declined by 4.6%. The Refinance Index fell 5.3% and is down 20% from a year ago. Spokesperson Joel Kan said, “The rapidly recovering economy and improving job market is generating sizeable home buying demand, but activity in recent weeks is constrained by quicker home-price growth and extremely low inventory.”

Freddie Mac recently reported that the 30-yr fixed-rate mortgage has risen to 3.18% in the latest survey from 2.65% in early January. Due to the increase in rates, Black Knight reports that there are 11.1 million “high quality” refinance candidates, the smallest number in a year. Black Knight also reports that home prices were up 11.6% annually in February, the highest annual rate in more than 15 years. New listing volumes fell 16% and 21% year-over-year in January and February, respectively.

April 05, 2021

Shrinking housing inventories continues to be an obstacle for the sector, especially with the spring buying season underway. Redfin reports that 59% of homes put up for sale went under contract within the first two weeks on the market … the fastest pace since at least 2012. During the 7 days ending March 28, 61% of homes sold in two weeks or less. In addition, asking prices of newly listed homes rose 14% year over year to $353,500, an all-time high, reports Redfin. “Some homebuyers have reached their limit on bidding wars and soaring prices,” said Redfin Chief Economist Daryl Fairweather.

The service sector of the U.S. economy continues to rebound after getting hit at the start of the shutdowns in March 2020. The service sector makes up about 2/3s of the U.S. economy and employs about 100 million workers. The ISM Service Index for March surged to 63.7 from 55.3 in February and above the 58.5 expected and was the highest level ever recorded. The previous high was in October 2018, when the index hit 60.9. The employment component was the best since May 2019. Many companies are now seeing pent-up demand as the country moves to fully reopening.

Accelerated vaccines, solid economic data along with stimulus hitting the U.S. economy have pushed the closely watched S&P 500 (4,074.72) to a fresh record intraday high in today’s session. Today’s record high ISM Service Index is positive news for the economic growth as many Americans get back to work. However, there are still many Americans unemployed.

March 29, 2021

Redfin reports that the median home price rose 16% annually to a record-high of $331,590 for the week ended March 21. The number of homes listed for sale on the market at any point during the period declined fell 42% from 2020 to a new all-time low. Redfin Chief Economist Daryl Fairweather said, “When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans.”

There is a huge government spending package due out this week while investors will be closely watching two key labor market reports for March with a holiday-shortened trading week. The ADP Private Payrolls Report will be released on Wednesday and the government Jobs Report for March will be delivered on Friday. The bond markets will close early on Friday at noon ET while stocks are closed for the session in observance of Good Friday. The Biden Administration is set to unveil a $3 trillion infrastructure package this week aimed at spurring on the economy, reduce carbon emissions and narrow economic inequality.

January 08, 2020

The housing market in 2020 has been upgraded in forecasts for single-family housing starts, new home sales and mortgage originations. Fannie reports that its Home Purchase Sentiment Index (HPSI) capped off a strong year in December with the index just below the survey high at 91.7. Three of the six HPSI components increased month over month, including the percentage of Americans who believe that home prices will go up over the next 12 months. Annually, the HPSI is up 8.2 points, driven primarily by consumers’ favorable mortgage rate expectations and a growing share reporting it’s a good time to buy a home.

Mortgage rates edged lower in the latest week and remain just above all-time lows. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage fell by four basis points to 3.91% with 0.33 in points. Mike Fratantoni, MBA Senior Vice President and Chief Economist said, “We expect that the strong job market will continue to support purchase activity this year, and the uptick in housing construction towards the end of last year should provide more inventory for prospective buyers.”

Private job growth surged in December as the labor market continues to be a big source of strength for the U.S. economy. ADP reports that private payrolls rose by 202,000 last month, well above the 155,000 expected. The November number of 67,000 jobs created was revised higher to 124,000. Ahu Yildirmaz, vice president and co-head of the ADP Research Institute said, “The service providers posted the largest gain since April, driven mainly by professional and business services. Job creation was strong across companies of all sizes, led predominantly by midsized companies.”

December 11, 2017

The two-day Fed meeting kicks off on Tuesday and ends Wednesday with the 2:00 p.m.ET release of the Fed statement. Fed Chair Yellen will hold a press conference immediately following the release at 2:30 p.m. ET in what will be her last as Fed Chair. The Fed Funds Rate is expected to rise by 0.25% to 1.50%. The statement could reveal more rhetoric on the Fed’s balance sheet and will reveal the current state of the economy. The Fed statement always carries a big headline risk.

Rising home prices across the U.S. lifted many underwater mortgages into positive equity between the second and third quarters of 2017. Analytics firm CoreLogic reports that 260,000 mortgaged properties regained equity between the second and third quarters of 2017. CoreLogic Chief Economist Frank Nothaft said, “Homeowner equity increased by almost $871 billion over the last 12 months, the largest increase in more than three years. This increase is primarily a reflection of rising home prices, which drives up home values, leading to an increase in home equity positions and supporting consumer spending.” Negative equity means your home’s current fair market value is less than your outstanding loan balance (i.e you owe more on your home than it’s worth).

November 29, 2017

Solid economic growth was seen from the second reading on third quarter Gross Domestic Product (GDP) where strong business inventory and equipment investment offset an ease in consumer spending. The second read on Q3 GDP rose 3.3%, up from 3.0% in the first reading. This was the best number since Q3 2014. GDP registered 1.2% in the first quarter of 2017 and 3.1% in the second quarter. Consumer spending fell to 2.3% in the third quarter after hitting 3.3% in the second quarter. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. It is considered the broadest measure of economic activity.

After a weak reading in September due to hurricanes Harvey and Irma, signed contracts to purchase existing homes surged in October. The National Association of REALTORS® reports that Pending Homes Sales increased 3.5% in October from September, the highest level since June. However, sales were down 0.6% from a year earlier. The South saw the biggest gain of 7.4%, which was most likely due to pent-up demand after the storms subsided.

A disturbing report on the state of future labor market activity was released by McKinsey research this week saying that a large portion of the global workforce could be displaced by 2030. The report estimates that between 400 million and 800 million people could be displaced by automation and need to find work. The professions that are more physical labor will be the most likely to see automation take over such machine operators and preparing fast food. Jobs that involve content providing, managing people and the like would be least impacted. In addition, jobs like gardeners, plumbers and, health care providers – will likely see less automation.

November 27, 2017

The Federal Reserve reports that home equity hit an all-time high in mid-2017 at $13.9T, up $0.5T from the 2006 peak and up $6T from the lowest point in the Great Recession. Quickly rising home prices are the main reason for the equity gains. Increasing home prices have also helped many homeowners to come out of negative equity. There were 12.2 million homeowners in negative equity at the end of 2009. That number has now decreased to just under 3 million in 2017.

The Commerce Department reported on Monday that sales of new homes rose to their highest level in 10 years due to strong sales across the country. New Home Sales rose 6.2% in October from September to an annual rate of 685,000 units, above the 629,000 expected. September was revised to 645,000 from 667,000. Strong sales were seen in the Northeast, Midwest, South and West. Year-to-date New Home Sales rose 18.7%. There is a 4.9 month supply of new homes for sale on the market, where a six-month supply is seen as a healthy balance between supply and demand.

Shoppers were out in full bloom as they shopped online on Thanksgiving and hit the malls on Black Friday. Black Friday and Thanksgiving online sales show U.S. retailers raking in a record $7.9B, up nearly 18% from a year ago. Cyber Monday is now underway and record online sales are expected to the tune of $6.6 billion. Total holiday sales are expected to come in between $678.75 billion to $682 billion, up from $655 billion last year.

November 08, 2017

The Mortgage Bankers Association (MBA) reported this week that mortgage credit availability tightened a bit in October following some loosening in September. The MBA’s Mortgage Credit Availability Index (MCAI) fell by 0.2% to 181.0 with two of the four components decreasing. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. Lynn Fisher, MBA’s Vice President of Research and Economics says, “While government and conforming credit programs saw slight increases in availability in October, a moderate decrease in the number of investor jumbo offerings resulted in a decrease in the total index.”

Government sponsored entity Fannie Mae released its Home Price Sentiment Index (HPSI) on Tuesday slipping on diminished home buyer and seller sentiment. Fannie’s HPSI fell 3.1 points on October to 85.2, falling from its all-time high matched in September. The net share of respondents who said now is a good time to sell a home decreased 8 percentage points compared to September while the net share who reported that now is a good time to buy a home fell 6 percentage points in October.

Mortgage rates edged lower in the latest week as reported by the Mortgage Bankers Association. The 30-year conforming fixed-rate mortgage fell four basis points to 4.18%, while the 30-year fixed-rate mortgage with jumbo loan balances declined to 4.12% from 4.16%. The MBA also reported that its refinance index fell 0.5%, purchase index +0.5%. Mortgage rates remain just above all-time lows.

Man counting using calculator and stress in problem with expenses.

November 07, 2017

CoreLogic reports that home prices nationwide, including distressed sales, surged by 7% in September 2017 compared to September 2016. Month over month, sales were up 0.9% in September from August. Limited inventories coupled with low home loan rates continue to be the catalysts driving higher home prices. In addition, a strengthening economy and healthy consumer balance sheets were also contributing factors to the rise in prices. Looking ahead, prices are expected to rise 4.7% from September 2017 to September 2018.

Black Knight reports that housing affordability improved in September as the average homeowner needed 21.4% of their median income to purchase a home. That is below July’s post-recession peak of 21.7% and well below the 26.2% needed in the years before the housing boom from 2000 to 2003. Black Knight went on to say that “affordability across most of the country still remains favorable to long-term benchmarks.”

The National Association of REALTORS® (NAR) reports that due to an improving economy, job growth and rising consumer confidence, that now is a good time to purchase a home. The NAR reports that there will be 5.47 million Existing Home Sales in 2017, the fastest pace since 6.47 million in 2006. Looking out to 2018, the NAR predicts that sales will grow by 3.7% to 5.67 million. The NAR said the greatest hurdle for home sales in 2018 is the limited supply of homes for sale on the market.

October 31, 2017

Home price gains remained solid in August due in part to low mortgage rates and an improving economy. The S&P/Case-Shiller 20-City Home Price Index rose 5.9% year over year, in line with estimates. David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said, “Home price increases appear to be unstoppable.” On a national basis, home prices rose 6.1% from August 2016 to August 2017, up from 5.9% in the previous month.

Americans were upbeat on the U.S. economy and future prospects in October, reports the Conference Board. The Consumer Confidence Index soared to 125.9 this month, the highest since December 2000. The percentage saying business conditions are “good” increased from 33.4% to 34.5%, while those saying business conditions are “bad” rose marginally from 13.2% to 13.5%. However, there was a slight downside in the report. The outlook by consumers on the job market was somewhat less favorable than in September.

The National Retail Federation (NRF) recently reported that holiday sales in November and December are expected to increase between 3.6% and 4%, excluding automobiles, gasoline and restaurants. The total dollar amount should come in around $682 billion, up from $655.8 billion last year. This year, Christmas comes 32 days after Thanksgiving, giving shoppers one more day to finish their shopping. This year’s forecast of 3.6% would match last year’s and is just above the five-year average of 3.5%.

Young attractive businessman with bags in hands

Blog

Home Borrowing, Applications, Refinance

April 07, 2021

Housing Inventories, US Economy, Stimulus

April 05, 2021

3/29/21 Median home prices, Private Payrolls Report, Easter

March 29, 2021

Housing, rates, and job growth

January 08, 2020

Fed Funds Rate is expected to rise | Rising home prices across U.S.

December 11, 2017

GDP Strong, Pending home sales increased, Automation will impact jobs by 2030

November 29, 2017

Home Equity all time high | Sales of new homes rose | Black Friday sales were up

November 27, 2017

Mortgage Credit, Home Price Sentiment Index, Mortgage rates edged lower in latest week

November 08, 2017

Home Prices surged, Sales are up, good time to purchase a home

November 07, 2017

Home price gains remained solid in August, Consumer Confidence Soared, Holiday sales are expected to increase

October 31, 2017

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