Real Estate Market Performance Will Be ‘Unexpected Legacy’ of 2020 |
According to a new report from Redfin, the national median home price rose 14.4% year over year to $333,900 in September, representing the biggest annual increase of any month since at least 2012.
“2020 will be known for a lot of things, and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” says Redfin chief economist Daryl Fairweather. “Demand typically abates in late summer and early fall, but seasonal patterns don’t stand a chance against the other factors motivating home buyers this year. Home buyers are seeking spacious homes in areas outside big cities to accommodate home-schooling and remote work. That, plus low mortgage rates and record-low inventory, is fueling historically high price growth and the fastest market in recent history.” Read more from Mortgage Orb.
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Homebuyer Demand May Have Peaked as Mortgage Applications Eke Out a Weekly Gain |
- Mortgage applications to purchase a home, which had fallen for four straight weeks, were essentially flat last week, rising just 0.2%.
- Refinances helped to push total mortgage application volume up 1.7% last week compared with the previous week, according to the Mortgage Bankers Association.
Homebuyer demand had mortgage lenders incredibly busy over the summer, but that may have peaked.
Mortgage applications to purchase a home, which had fallen for four straight weeks, were essentially flat last week, rising just 0.2%, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinances helped to push total mortgage application volume up 1.7% last week compared with the previous week. Read more from CNBC.
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Pending Home Sales Fall Back but Still the 2nd Highest Level on Record
Pending Sales Did Rise 2% in the Northeast
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Pending home sales faltered a bit in September, like new home sales announced earlier this week, the decline ended a four-month winning streak. The National Association of Realtors® (NAR) said that its Pending Home Sales Index (PHSI) fell to 130.0, a 2.2 percent retreat from the August level.
The index, based on signed contracts to purchase existing single-family homes, townhouses, condominiums, and cooperative apartment, fell in every region but the Northeast. However, it is still 20.5 percent higher than in September 2019 and retained double digit annual growth in all regional indices. Read more from Mortgage News Daily.
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More New Listings Are Finally Emerging |
Buyers may finally be getting more housing choices. The number of newly listed homes is showing the most improvement since March. Realtor.com says its data shows the housing market is gradually moving toward a more balanced one when it comes to inventory. Plus, an overdue seasonal slowdown may be starting to take hold.
Still, the number of homes for sale remains at record lows. Homes are selling 14 days faster than a year ago as demand stays high. However, glimmers of hope for buyers are emerging as more listings hit the market.Read more from NAR's Realtor Magazine.
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New Home Sales are up an Astounding 32.1% Year Over Year |
The one economic sector that has blown away my estimates this year has been the new home sales market. I predicted peak year-to-date growth of 4.7% but this was before COVID-19, which temporarily crushed bond yields and mortgage rates.
This sector is very sensitive to yields in both a positive and negative direction. When mortgage rates got to 4.75% -5% in 2018, demand fell and inventory for new homes went up. This dramatically slowed the rate of growth in construction in 2019. We had to work off the excess housing supply created with those higher rates to get housing starts to be roughly flat for 2019. But, this isn’t what happened this year when mortgage rates went below 3%.
Today new home sales are up 32.1% year over year and are up 16.9% year to date. Details from the Census Bureau/HUD report released today. Read more from Housing Wire.
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Patio Heaters Are the 'New Toilet Paper' |
Fast Company is calling patio propane heaters the “new toilet paper” of pandemic sales. That’s because heaters are flying off store shelves at record speeds as homeowners look to extend their outdoor spaces amid cooler weather in many locales.
The pandemic has prompted greater interest in home outdoor space as owners try to maximize every square inch. It’s become an important consideration for home shoppers too. Real estate stagers are paying particular attention to showing off homes' outdoor amenities, which includes adding fire pits with surrounding chairs and a tray of s’mores ingredients to set a scene. They also may even bring in a patio heater to show how a spot can be used even as the weather cools. Read more from NAR's Realtor Magazine.
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Mortgage Market Update
Mortgage Rates Remain Relatively Flat
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The low mortgage rate environment is providing tangible support to the economy at a critical time, as housing continues to propel growth. Strong purchase demand is helping to lift the construction, manufacturing and transportation industries that build new homes and it is also leading to more consumer spending for owners, who are selling or improving their homes. On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payment, which means they can spend, save or pay down debt more so than they have in the past.
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We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us. |
phone: 610.834.8700
Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570.
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