Monday, January 13, 2020

National update on Real Estate and Mortgage Activity

HOUSING NEWS
New Home Sales About 17 Percent Higher
 From Last Year

As 2019 comes to a close, there are several signs that the
housing market will be strong in the year ahead. Among them,
new home sales might top the list. For example, according to
 the most recent numbers from the U.S. Census Bureau and
 the Department of Housing and Urban Development, sales
 of newly built single family homes are now nearly 17 percent
 higher than they were at the same time last year.

Additionally, the amount of new homes for sale is now at a
5.4 month's supply. In short, demand for new homes is high
 and that's good for the economy and the housing market.
 So, what's driving the increased demand for new homes?
A large part of it is mortgage rates. Rates fell in 2019 and
 helped offset home-price increases, keeping affordability
 levels manageable.

Combined with a strong job market and rising wages, lower
borrowing costs motivated more Americans to want to make
 a move. With buying conditions expected to remain fairly
 stable in 2020, more of the same is expected in the year ahead.

More here.
FINANCE NEWS
Most Markets More Affordable than
Historic Average

Measuring housing-market affordability typically involves
 making some comparisons. Of course, with any comparison,
 what you discover depends on what you're comparing.
 Home prices, after all, could be down from where they were
 last month but up compared to the same time last year.

That's why the best comparison is usually one that takes
the broadest and longest view. For ATTOM Data Solutions'
 fourth-quarter 2019 U.S. Home Affordability Report, they
calculated current affordability levels then compared them
 to their long-term average. What they found was 53 percent
 of the 486 counties included in the report were more
 affordable than their historic average. That includes
counties in and around Chicago, Washington D.C.,
and New York, with areas like Orange County, CA and
 Bay County, FL showing big gains in the past year.

Todd Teta, chief product officer with ATTOM, says mortgage
 rates and wages are key. "Homes were actually a bit more
 affordable because of declining mortgage rates combined
 with rising pay to overcome the continued price run-up,"
Teta said. "As long as people are earning more money and
shelling out less to pay off home loans, the market should
 remain strong with prices continuing to rise, at least in the near term."

More here.
MORTGAGE NEWS
Mortgage Rates Remain Flat, Just Above Historic Lows

According to the Mortgage Bankers Association's (MBA)
 Weekly Applications Survey, average mortgage rates were
 flat last week from the week before. There were slight
increases to rates for 30-year fixed-rate mortgages with
 both conforming and jumbo balances and loans backed
 by the Federal Housing Administration (FHA). Rates for
 15-year fixed-rate mortgages were unchanged week-over-week.

Despite rates remaining just above historic lows, demand for
mortgage applications fell from one week earlier. Michael Fratantoni,
 MBA's senior vice president and chief economist, said home-buying
activity is typically slow at this time of year. "We are in the slowest
time of the year for the purchase market," Fratantoni said.
 "Purchase application activity declined after the seasonal adjustment,
but still remains about 5 percent ahead of last year's pace.
 The increase in construction activity will bolster housing
inventories, which should be a positive for purchase volumes
 going into 2020."

Refinance activity also fell last week, though it remains 128 percent
higher than last year at the same time. The MBA's weekly survey
has been conducted since 1990 and covers 75 percent of all retail
 residential mortgage applications.

More here.
ECONOMIC NEWS
Personal Income Up 0.5 Percent

The Bureau of Economic Analysis recently reported on personal income,
 which has gone up by 0.5 percent. Disposable personal income, which
is the money left over after taxes, increased at the same rate. Personal
 income was mostly unchanged the preceding month, so the most recent
 increase could be a sign of a new trend.

Personal consumption expenditures (the money that people spend)
 increased by 0.4 percent after staying flat the preceding month. The
 personal savings rate was at 7.9 percent, which is under the recommended
10 percent, but is still a good sign that Americans are saving some of
 their money.

In short, Americans are earning more, spending more, and are saving
a decent amount of money. If this trend continues, 2020 could shape
out to be a good year for the economy and consumers.

More here.

Thanks to Sue Baxter at FM Loans for the use of this information.

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