Mortgage Rates have Significantly Decreased Since mid-November but Home Delistings Hit Record High Existing Housing Inventories Skyrocket Upwards

Mortgage Rates

Home Delistings Hit Record High in November as Buyers and Sellers Retreated

During the 12 weeks ending Nov. 20, a record 2% of U.S. properties for sale were delisted weekly on average, up from 1.6% the previous year. Since then, the amount has somewhat decreased, falling to 1.9% during the 12 weeks ending Nov. 27, including the Thanksgiving holiday. Redfin’s research of MLS data from 43 of the 50 most populated U.S. metropolitan areas—those with enough data—shows that this is the case. 

Because they frequently receive no offers for the price they wish to sell for and occasionally no offers at all, sellers are pulling their properties off the market. This is due to a severe decline in demand from homebuyers brought on by rising mortgage rates and steadily rising housing prices. Although mortgage rates have significantly decreased since mid-November, this has not yet brought many buyers back into the market 

Existing Housing Inventories at 7-Year High

As dropping rates enticed some buyers back in, Redfin, a Seattle-based brokerage, said its Homebuyer Demand Index increased last week. Yet, with the average home for sale staying on the market longer and the number of homes for sale continuing to climb, many prospective buyers are waiting for cheaper rates and prices.

Based on the report, the number of homes for sale increased by 15% annually during the four weeks that ended on Dec. 4. This is the most significant increase since at least 2015. However, the number of new listings decreased by more than 20%, indicating that more people are choosing to wait it out while looking for a home while mortgage rates and home prices continue to fall from their peaks.

However, as mortgage rates continued to fall from their peak in early November, the Redfin Homebuyer Demand Index recovered from its low point, rising 5% from a week earlier. The typical American homebuyer now pays around $50 less per month for housing, thanks to falling rates.

Among 11 of the 50 most populous U.S. metro areas, six of which are in California, home sale prices decreased from a year earlier. Prices in San Francisco dropped 7.8%, San Jose 3.6%, Los Angeles 2.2%, Detroit 1.4%, Sacramento 1.2%, and Pittsburgh 1.1%. In Oakland, Anaheim, Austin, Philadelphia, and Phoenix, they decreased by less than 1%.

Mortgage Rates Drop After CPI Report, Housing Market Still In Trouble

According to Mortgage News Daily, the 30-year fixed mortgage’s average rate decreased to 6.28% on Tuesday. It is presently at its lowest point since the middle of September. The dip happened after the consumer price index for November, a widely followed indicator of inflation, came in lower than predicted. Investors poured into the U.S. as a result of the report. Treasury bonds decreased yields. Mortgage rates roughly follow the yield on the 10-year Treasury.

Mortgage rates began to climb at the outset of this year and picked up speed in the spring and summer. By the end of October, the 30-year fixed rate had increased from about 3% to well over 7%, which caused an early deep freeze in the housing market. According to the most recent data from the National Association of Realtors, sales of existing houses have decreased for nine months and were down 24% in October compared to the same month last year.

But after the CPI report for October showed that inflation was slowing, rates then dropped significantly in November, which ended at a rate of 6.63%. Some speculated, if warily that the rate decrease may be luring buyers back into the market. 

Next week’s potential market-moving reports are:

  • Monday, December 19th – NAHB Home Builders’ Index
  • Tuesday, December 20th – Building Permits (SAAR), Housing Starts (SAAR)
  • Wednesday, December 21st – Consumer Confidence Index, Existing Home Sales (SAAR)
  • Thursday, December 22nd – – Initial and Continuing Jobless Claims
  • Friday, December 23rd – New Home Sales (SAAR), PCE Price Index

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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September – U.S. Single-Family Home Prices Slows October – Single-Family Home Sales Picks Up, November – Mortgage applications still down despite falling rates

Single-Family Home Sales

Single-Family Home Sales Pick Up In October

Despite continuing high mortgage rates and home prices, sales of new single-family homes in the U.S. increased in October.

According to the most recent report from the Commerce Department, new home sales increased 7.5% in November to a seasonally adjusted annual rate of 632,000 units. The number of units sold in September decreased from the previously stated 603,000 units to 588,000 units.

Analysts surveyed by The Wall Street Journal predicted a 5.5% decline in new-home sales. This is only one month of data, so it’s still too early to declare that this might signify a market turning point.

Compared to September, the median sales price of new homes sold in October increased to $493,000 from $455,700. According to the Commerce Department, that is a 15.4% increase from a year ago. There were also 1.5% more new residences available for purchase. At the present sales rate, that translates to an 8.9-month supply. From a 5.7-month pool in January, this is an increase and far above the anemic inventory that existed in 2020 and 2021.

Regionally, the Northeast and the South saw the most significant sales increase. According to the survey, sales decreased in the South and the Midwest.

U.S. Single-Family Home Prices Slow Again In September

According to highly watched surveys released Tuesday, demand for single-family homes in the U.S. decreased in September due to increased mortgage rates.

In September, the S&P CoreLogic Case Shiller national home price index fell 0.8% month over month. For the first time since late 2018, monthly home prices declined in July.

After increasing by 12.9% in August, home price growth slowed in September to 10.6%. Aggressive Federal Reserve interest rate increases intended to lower high inflation by reducing economic demand have severely harmed the housing market.

Freddie Mac data showed that the 30-year fixed mortgage rate crossed the 7% threshold in October for the first time since 2002. Even while the rate dropped back to 6.58% on average last week, it is still significantly higher than the 3.10% average for the same time the previous year.

As the Fed continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable,” Craig Lazzara, managing director at S&P DJI, said in a statement. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”

According to data released this month, the sales of previously owned homes saw their ninth consecutive monthly dip in October. Single-family homebuilding and permits for future construction sank to their lowest levels since May 2020.

According to a Federal Housing Finance Agency study, home prices increased 0.1% every month in September after falling 0.7% in August. Prices rose 11.0% over the previous 12 months, following an increase of 12.0% in August.

MBA Weekly Survey Nov. 30, 2022: Applications Down Despite Falling Rates

As per Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending November 25, mortgage applications decreased for the first time in three weeks despite interest rates falling below 6.5%. The outcomes for the week have been modified to account for the Thanksgiving holiday.

On a seasonally adjusted basis, the Market Composite Index decreased by 0.8% from the prior week, while the unadjusted Refinance Index dropped 13%. Both metrics had fallen to their lowest points since 2000. Refinance applications comprised 26.1% of all mortgage activity, down from 28.4% the week before.

However, purchase applications rose. The seasonally adjusted Purchase Index went up 4% over the previous week. 

The proportion of FHA applications dropped from 13.4% the week before to 12.2% overall. The ratio of V.A. applications climbed from 10.5% to 11.2% the previous week. The USDA’s percentage of all applications dropped from 0.6% the last week to 0.5%.

Mortgage rates also decreased for the majority of other loan types.

Next week’s potential market-moving reports are:

  • Monday, December 5th – ISM Services Index
  • Tuesday, December 6th – Trade Deficit 
  • Wednesday, December 7th – Productivity, Unit Labor Costs, Consumer Credit
  • Thursday, December 8th – – Initial and Continuing Jobless Claims
  • Friday, December 9th – Consumer Sentiment Index, 5-Year Inflation Expectations   

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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What’s falling? Largest Drop in Mortgage Rates in 41 Years, Mortgage Applications Drop in October and Existing Home Sales Fall 9th Straight Month

Mortgage Rates

Largest Drop in Mortgage Rates in 41 Years

Last week saw the most significant weekly drop in mortgage rates since November 1981, falling by almost a half percent.

According to Freddie Mac, the typical 30-year fixed mortgage rate decreased from 7.08% to 6.61%. The dip comes after a 10-year Treasury rate sharply fell last week after data from the government revealed that inflation slowed last month. The rapid price drop provided some respite to still-active homebuyers and sellers who were under pressure from high prices, which increased activity in the otherwise slow market.

The drop in rates incentivized buyers to rush and try to lock rates this weekend, the difference in demand was significant,” said Adriana Perezchica, president of Via Real Estate. “Until recently, buyer demand had weakened as borrowers have had a hard time keeping up with higher rates and home prices. We don’t know how long this dip in rates will last…and buyers are absolutely racing to lock a rate.

As per the Mortgage Bankers Association’s most recent survey of applications, demand for mortgages increased last week as the number of purchase applications rose by 4%.

October Sees 29% Drop in New Home Mortgage Applications

According to data from the Mortgage Bankers Association (MBA), mortgage applications for new home purchases have slowed down in October on both a monthly and annual basis.

Based on the most recent data from the MBA’s builder application survey, there were even fewer new home purchases in October (-13%) than in September and a 28.6% decrease from last year. The data does not include the usual seasonal pattern corrections.

The abrupt increase in mortgage rates to 7%, according to MBA vice president and deputy chief economist Joel Kan, reduced both the overall demand for new homes and the spending power of many potential buyers, which had a negative impact on the results of new home purchases.

Kan further observes that the average loan size dropped to $400,616 from $406,767 the month prior and an 8% reduction from its peak in April of this year. The MBA cited slower home price growth and a decline in demand for more expensive properties as the causes of the most recent “moderation” in loan amounts.

Conventional loans accounted for 68.6% of loan applications in October, followed by FHA loans (20%), Veterans Affairs loans (11%), and USDA rural housing service loans (0.3%).

Existing Home Sales Fall 9th Straight Month

According to the National Association of Realtors report, a seasonally adjusted annual rate of 4.43 million existing homes was sold overall in October, a 5.9% decrease from September, marking the ninth consecutive monthly decline. Sales were down 28.4% yearly from 6.19 million in October 2021.

A seasonally adjusted annual rate of 3.95 million single-family homes was sold in October, a decrease of 6.4% from 4.22 million in September and 28.2% a year earlier. Also, the price of an existing single-family home jumped to $384,900, an increase of 6.2% over the previous year. 

The data further reports that there were 1.22 million housing units available nationwide at the end of October, a 0.8% decrease from September and one year earlier (1.23 million). At the current sales rate, unsold inventory has a 3.3-month supply, which is an increase from 2.4 months and 3.1 months in September.

As prices increased across the board, the median existing-home price for all dwelling types in October rose to $379,100, 6.6% from October 2021 ($355,700). The longest streak in history has been 128 months straight months of year-over-year growth.

Next week’s potential market-moving reports are:

  • Monday, November 28th – No Report
  • Tuesday, November 29th – U.S. Home Price Index, Consumer Confidence Index 
  • Wednesday, November 30th – Job Openings, Quits, Pending Home Sales Index
  • Thursday, December 1st – – Initial and Continuing Jobless Claims, Construction Spending
  • Friday, December 2nd – 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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