Mortgage Rates Increase – According to Freddie Mac, mortgage rates are now at their fourth highest level of the year. The 30-year fixed-rate mortgage climbed for the second consecutive week, averaging 4.6 percent. “The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months,” says Sam Khater, Freddie Mac’s chief economist. Even with home price growth easing slightly in some markets, Khater notes that mortgage rates hovering near a seven-year high will certainly create affordability challenges for prospective buyers looking to close on a home purchase.
Has the Inventory Crunch Begun to Subside? – Based on the National Association of REALTORS® reports, contract signings rose in all four major regions across the U.S. last month, a sign that dwindling home sales will reverse course in the coming months. The NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 0.9 percent month over month in June to a reading of 106.9. “After two straight months of declines in pending home sales, home shoppers in a majority of markets had a little more success finding a home to buy last month,” says NAR Chief Economist Lawrence Yun. “The positive forces of faster economic growth and steady hiring are being met by the negative forces of higher home prices and mortgage rates. Even with slightly more homeowners putting their home on the market, inventory is still subpar and not meeting demand. As a result, affordability constraints are pricing out some would-be buyers and keeping overall sales activity below last year’s pace.”
Young Americans Push Homeownership Rate Up – According to the Commerce Department, the U.S. homeownership rate posted another increase, reaching 64.3 percent in the second quarter, up a tenth of a percentage point from the first quarter. The rate has increased 0.6 percentage points over the past year. Younger Americans, specifically those under the age of 35, are behind most of the recent increases in the ownership rate. The homeownership rate of this younger buyer group increased to 36.5 percent in the second quarter, up 1.2 percentage points from a year earlier. Despite the overall increase in the second quarter, the homeownership rate still remains far below its peak of 69.2 percent in late 2004.
15 More States Now Can Do Fully Digital Home Closings – Based on a new partnership announced between Notarize and Title Resources, consumers are able to complete a 100 percent digital closing process in 15 states, where they won’t have to be present at the closing table. Many lenders and title companies now offer digital applications and underwriting processes. However, for the most part, buyers are still required to be present to have a notary public come on settlement day. The company Notarize allows consumers to have their documents notarized via webcam. Notarize was part of the 2017 Reach Accelerator program through Second Century Ventures, a strategic investment arm of the National Association of REALTORS® that mentors start-up firms and offers them wide exposure within the real estate industry. Earlier this year, Second Century Ventures also announced it was making a strategic investment in Notarize, following the company’s participation in the REach Accelerator program. More than 60 percent of real estate professionals surveyed by NAR and Notarize earlier this year reported a closing last year that was delayed or canceled due to one of the parties not being able to be present. Thirty percent of respondents reported anywhere between 5 to 25 percent of their closings are delayed or canceled for this reason. The new states announced under the new partnership between Notarize and Title Resources are Colorado, Connecticut, Delaware, Hawaii, Idaho, Louisiana, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Oklahoma, South Carolina, and Wisconsin.