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.