According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell sharply last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. But though rates were more favorable, requests for mortgage loan applications still fell. In fact, overall demand was down 2.5 percent from the previous week. Joel Kan, MBA’s associate vice president of industry surveys and forecasts, says, though demand for loans to buy homes dropped, the outlook remains good. “Despite more favorable borrowing costs, and after a three-week surge in activity, purchase applications have slowed over the past two weeks, and are now almost 2 percent lower than a year ago,” Kan said. “However, moderating price gains and the strong job market, including evidence of faster wage growth, should help purchase growth going forward.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Homeowners who sold a house in 2018 saw an average gain since purchase of $61,000, according to new numbers from ATTOM Data Solutions. ATTOM’s Year-End 2018 U.S. Home Sales Report found that home sellers averaged a 32.6 percent return on investment when comparing the price their home sold for with the original purchase price. The improvement was an $11,000 increase from the year before. But though that’s good news for anyone thinking about selling a home sometime soon, ATTOM’s chief product officer, Todd Teta, says changes may be on the way. “The economy is still going strong and home loan rates remain historically low,” Teta said. “But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019.” But though market conditions are beginning to change, home prices are still expected to rise this year and, with home seller profits at a 12-year high, that means it’s still a good time to sell a house. More here.

Fannie Mae’s quarterly Mortgage Lender Sentiment Survey asks senior mortgage executives for their perceptions of the market and forecast for the future. According to the most recent release, lenders point to an “insufficient supply of homes available for sale” as the primary reason for slow home sales growth last year. In fact, 48 percent of responding lenders said that too few homes for sale held buyers back, while rising interest rates and higher prices were also commonly cited factors. Similarly, when asked for suggestions for what could be done to improve affordability in the months ahead, increasing the housing stock led the list. In short, mortgage execs see low inventory as the market’s biggest issue. This isn’t a surprise. The fact that there’s been a lower-than-typical number of homes for sale has been pushing home prices upward and keeping competition for affordable homes high. The good news, however, is that recent data shows inventory has been rising and, if the trend continues, it could help provide some relief to buyers this year. More here.

Potential spring home buyers may find that they’ve regained some negotiating power when they head out to shop for a house to buy. That’s because, after a few years where sellers held all the cards, buyers are beginning to see conditions shift in a more favorable direction. For example, new data shows that the number of home buyers who paid above asking price in December saw its biggest month-over-month decline in six years. In fact, just 19 percent of homes sold during the month went for a price above what their owner had it listed for. That’s a five percent decline from its peak in May of last year. Simply put, continued home price increases have motivated more homeowners to put their homes up for sale. And, as the number of homes for sale has risen, it’s reduced the amount of competition among buyers. But, while competition may have begun to slow down, it isn’t quite a buyer’s market just yet. So, if you’re looking to buy a home in the months ahead, you should still be prepared, prequalified, and ready to move fast. Good homes will be in high demand, even if the competition isn’t quite as heavy as it has been in years past. More here.

The National Association of Realtors’ Pending Home Sales Index measures the number of contracts signed to buy homes during a given month. Since it measures signings, and not closings, it can be an important indicator of future home sales. In December, the index fell 2.2 percent from the month before. But, Lawrence Yun, NAR’s chief economist, sees some encouraging signs amid the end-of-the-year slowdown. “The longer-term growth potential is high,” Yun says. “The Federal Reserve announced a change in its stance on monetary policy. Rather than four rate hikes, there will likely be only one increase or even no increase at all. This has already spurred a noticeable fall in the 30-year, fixed-rate for mortgages. As a result, the forecast for home transactions has greatly improved.” In addition to good news about rates, there is also an increasing number of homes for sale. And, since more available inventory helps keep prices down, that’s good for home buyers. Cities in the West saw the largest increase in active listings year-over-year, with Denver-Aurora-Lakewood, Seattle-Tacoma-Bellevue, San Francisco-Oakland-Hayward, San Diego-Carlsbad, and Portland-Vancouver-Hillsboro seeing the biggest improvement compared to the year before. More here.