According to Fannie Mae’s most recent forecast, the housing market is likely to revert to a normal-ish level of price appreciation for the silent majority despite an abatement from the year’s dramatic price surge.

Case-Shiller Data Suggests that Home-Price Appreciation is Tapering

The S&P Case-Shiller U.S. National Home Price NSA Index reported an annual gain of 19.8% in August, indicating that home price growth is beginning to settle throughout the country. It is nearly the same increase as the previous month, marking the first time since early 2020 that the year-over-year increase in home prices hasn’t seen significant increases from one month to the next. The Case-Shiller 10- and 20-city composite indices, which track price increases in the country’s biggest cities, also mirrored the cooling. The 10-city index increased by 18.6%, while the 20-city index increased by 19.7%, slightly less than their July gain rates.

It’s worth noting that the 20-city composite index continues to climb faster than the 10-city index. Because the latter index only includes prices in the most populous U.S. metro areas, the 20-city’s higher gain indicates price growth in smaller, more inexpensive regions where migration from more expensive cities has aided price rises. Phoenix continued to lead all cities with annual price gains of 33.3%. It was the 27th straight month that the Arizona capital topped this category. San Diego (26.2%) was second, followed by Dallas (24.6%) and Seattle (24.3%).

Fannie Mae Forecasts Housing Market Cool Off In 2022

According to Fannie Mae’s most recent forecast, median home prices will increase 7.9% between the fourth quarter of 2021 and the fourth quarter of 2022. While this would be a slowdown from the year’s dramatic price surge, it would still be robust growth by historical standards. (Since 1987, the average yearly increase in property prices in the United States has been 4.1 percent.) At least in the eyes of Fannie Mae, the housing market is likely to revert to a normal-ish level of price appreciation.

“Mortgage rates may rise in response to the tighter environment, but we expect the severe shortage of homes for sale to remain the primary driver of strong house price appreciation through at least 2022, limiting interest rate effects on home sales and home prices,” wrote Doug Duncan, chief economist at Fannie Mae, in its latest 2022 outlook.

New Home Sales Post Double-Digit September Gain

The U.S. Census Bureau and the Department of Housing and Urban Development report that newly constructed single-family homes sold at a seasonally adjusted annual pace of 800,000 units this month. This surge was a 14.0% increase over August’s pace of 702,000 units. Earlier reports put the figure at 740,000 units. Sales of 971,000 units were sold at a seasonally adjusted rate of 17.6 percent higher in September 2020 than in September 2019. Analysts polled by both Econoday and Trading Economics had a consensus forecast of 760,000 in sales.

The median price of a home sold in September was $408,800 compared to $344,400 last year. The average prices for the two periods were $451,700 and $405,100, respectively.

There were an estimated 379,000 new homes for sale at the end of September. At the current rate of sales, this amounts to a 5.7-month supply. In August, the inventory was good for 6.5 months, while in September 2020, it was only enough for 3.5 months.

The majority of the sales growth in September came from two regions: the Northeast with 32.3 percent, and the South with a 17.8 percent increase in sales compared to August.

Next weeks potential market moving reports are:

  • Monday, November 1st – Construction Spending
  • Tuesday, November 2nd – Homeownership Rate
  • Wednesday, November 3rd – ADP Employment Report, Federal Reserve Statement
  • Thursday, November 4th – Initial Jobless Claims, Continuing Jobless Claims
  • Friday, November 5th – Consumer Credit, Unemployment Rate, Average Hourly Earnings

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (800) 216-1047

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Are Young Homebuyers Priced Out of the Market? Investigate How to Buy Your First Dream Home in Your 20s

If you’re in your 20s and thinking about buying a house, it’s easy to understand how you could be confused and overwhelmed. According to a study by the National Association of Realtors, people under 35 with student loans are postponing home buying by an average of 8 years. But buying a home while in your 20s is not only a possibility, you’ve got a lot of resources that could make it happen for you. First, we’d like to dispel a few myths about home buying that could have been keeping you out of the home market.

Student loans will prevent you from buying a home

The problem of student loan debt is finally on the national agenda, and lawmakers are seriously discussing reducing the interest on student loans or even forgiving some or all student loan debt. Although this plan is still under discussion, some homebuilders and the majority of states offer home buying assistance programs for people whose student loan debt is preventing them from buying a home. 

California offers the CalHFA “My Home” first time homebuyer assistance program which provides down payment and closing cost assistance. CalHFA also works with counties to offer tax credits to make mortgage payments more affordable for first-time homebuyers. A first-time homebuyer is anyone who has not purchased a home during the past three years. So, even if you’ve bought and sold a home before, you could be eligible for one of these programs as long as it hasn’t been during the past three years.

Work on your credit score

These days, you can sign up to monitor your credit score via dozens of apps and financial programs. The majority of credit cards and financial institutions offer free or very low cost credit score monitoring. Learn how your credit score works and work to increase it. Your debt-to-income ratio and credit use ratio will affect your credit score, along with any late payments.

You’ll want to increase your credit score as much as possible: ideally to 660 or better. However, some mortgage programs, including FHA home mortgages, can offer loans to people with credit scores as low as 580. 

Work with a knowledgeable realtor and mortgage broker

Everyone is online and connected, and you can shop for homes using your mobile device — even apply for a mortgage. But many home loan programs still work through mortgage brokers. And, not every home for sale is a featured listing on an online home search service. The personal touch still matters — it might matter more than ever these days. You can learn what your alternatives in home buying really are by working with a mortgage and home buying professional.


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Considering Buying Your First Home in Los Angeles County This Year? Get To Know These Latest Programs

Most people who’ve never bought a home before know they’ll be first-time homebuyers when they start their home search. But we wonder if people are aware that if you haven’t owned and occupied your own home for the past three years — even if you owned a home before — programs like the Los Angeles County Development Authority (LACDA) First-Time Homebuyer Program can help.

How Does the LACDA help first-time homebuyers?

The LACDA provides several programs to help people buy their first home. Some of the organization’s programs are limited. For example, the Home Ownership Program (HOP) only provides 10 applications for loans from HOP-qualified lenders. You have to meet income requirements for this program. For example, a family of four can’t have more than $83,500 in income to qualify.

LACDA also offers a mortgage income tax credit to help home buyers increase the amount of money they can use to pay their mortgage. The income tax credit directly reduces the amount of income tax a qualified family pays up to 20% of the interest you pay on your mortgage. For a 30-year fixed-rate mortgage, a 20% tax credit could add up to a lot of money during the first five years of your loan and potentially longer.

The LACDA’s First Home Mortgage Program is available in Los Angeles and Orange Counties. The program combines competitive 30-year home mortgages offered through participating qualified lenders. The mortgages can be USDA, VA, FHA and Conventional home loans. The First Home Mortgage Program also offers up to 4% of the total loan amount as a non-repayable grant that homebuyers can use for down payments and closing costs.

Are there any limitations on the LACDA home buyer programs?

The programs are limited to people with moderate (not low) incomes. For example, a couple can’t earn more than $125,280 a year to participate in the First Home Mortgage Program in Los Angeles County, or $142,440 a year for the Orange County program. 

Los Angeles and Orange County both care about increasing home ownership. Probably the biggest takeaway you can have from these county-based mortgage programs is that organizations which are dedicated to hellping first-time homebuyers will consider you a “first time” homebuyer if you haven’t owned a home in three years or more. You do have a lot of options and you can learn more by working with an experienced real estate and home mortgage professional.


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