Study: Buyers Have $33K More in Purchasing Power – According to a new Redfin study, it showed low mortgage rates are enabling home buyers to stretch their budgets more this year. Buyers can afford about $33,250 more on a home purchase compared to a year ago, a 6.9% increase. However, an 8.2% uptick in year-over-year home prices essentially is canceling out those savings as buyers are still being drawn into the market by the low mortgage rates. Fifty-five percent of consumers who are moving for pandemic-related reasons say that low mortgage rates are a motivating factor in their homebuying plans, according to the Redfin survey of about 1,000 consumers who plan to buy a home within the next 12 months.
Source and link to the full article: “Homebuyers on a $2,500 Monthly Budget Can Afford $33,000 More With Low Mortgage Rates, But Higher Home Prices Cancel Out Increase,” Redfin (Sept. 3, 2020)
Mortgage Applications Are 40% Higher Than a Year Ago – Based on the Mortgage Bankers Association reports, the home shopping spree continues. Typically, the end of August sees a slowdown in the housing market, but this year, real estate has shown no signs of letting up. Mortgage applications to purchase a home increased 3% recently. But it’s the year-over-year jump of 40% that has surprised economists. Year-over-year comparisons are usually in the single digits. “There continues to be resiliency in the purchase market,” says Joel Kan, economist for the Mortgage Bankers Association. “The average loan size continued to increase, hitting a survey high at $368,600. Highlighting the strong overall demand for buying a home, conventional, VA, and FHA purchase applications all increased recently.”
Source and link to the full article: “Mortgage Demand From Homebuyers Surges 40% From a Year Ago Amid Sales Spree,” CNBC (Sept. 9 2020)
Poll: Americans Say It’s a Good Time to Buy and Sell – According to Fannie Mae’s Home Purchase Sentiment Index, it’s not too surprising Americans have expressed optimism toward home selling. But Americans also say it’s a good time to be a buyer, in fact, more Americans are bullish over buying than selling. This reflects the attitudes of more than 1,000 respondents toward housing, which shows consumer sentiment over five of six housing indicators increased in August. Consumers are expressing more optimistic views than previously over buying and selling, and fewer concerns over job losses. The buyer optimism stems from near-record low mortgage rates, which are helping to “restore much of consumers’ positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The August survey was conducted as consumers continue to face uncertainty regarding schools and business reopening plans and as the CARES Act $600-per-week income supplement expired.”
Source and link to the full article: Fannie Mae
Millennials Are Fueling Housing’s Rebound – Based on The Wall Street Journal report, young prospective home buyers in their 20s and 30s who were once reluctant to purchase are now driving the housing market recovery during the pandemic. Even prior to the pandemic, millennial buyers were starting to increase in number, accounting for more than half of all new-home loans early last year. They have consistently stayed above that level in the first months of this year, too, realtor.com® data shows. The large size of this generation has prompted predictions that they will make a lasting impact on the housing market. Millennials have now surpassed baby boomers as the largest living adult generation in the U.S., Pew Research Center data shows. The largest segment of millennial births occurred in 1990, so that cohort is turning 30 this year. “We anticipate as they turn 31 and 32, we’ll just see homebuying demand grow,” Odeta Kushi, deputy chief economist at First American Financial Corp., told the Journal.
Source and link to the full article: “Millennials Help Power This Year’s Housing-Market Rebound,” The Wall Street Journal (Aug. 27, 2020)