According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. In fact, rates were up 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. As a result, demand for refinance applications fell 5 percent from the week before. Demand for loans to buy homes, however, increased 7 percent. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said it was the purchase market’s best week in a month. “With the spring buying season at the doorstep, the purchase market had its strongest showing in four weeks, with gains in both conventional and government applications,” Kan said. “Overall activity was 2.4 percent higher than a year ago, and loan sizes moderated for the second straight week – potentially a sign that more first-time buyers are entering the market.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

To buy a house, you need to make a down payment. But how much of a down payment you decide to make depends on a lot of factors, including your savings, the price of the house you’re buying, and the terms of your loan. Which means, the amount varies from one buyer to the next. There are, however, some new numbers that can help give prospective home buyers a rough idea of what to expect when the time comes. According to ATTOM Data Solutions’ fourth-quarter 2020 U.S. Residential Property Mortgage Origination Report, the median down payment on single-family homes and condos at the end of last year was $24,500. Based on the median sales price of homes sold in the fourth quarter, that represents a nearly 8 percent down payment. It’s also a new high and a significant jump from where it was one year earlier, when the median down payment was $13,441. Why the increase? Put simply, home prices. Already low inventory was driven lower last year by the pandemic and the lack of available homes for sale has driven prices higher. Those increases have caused down payments to grow as well. As the market balances and prices moderate, however, down payments should too. (source)

Fannie Mae’s Home Purchase Sentiment Index is a monthly survey that looks at how Americans feel about buying and selling homes in today’s market. The survey asks participants for their opinions on home prices, mortgage rates, their personal financial situation, job security, etc. In February, the index was relatively flat. Results show fewer respondents said it was a good time to buy or sell a home than did the month before. There was also an increase in the number of respondents who said they believe home prices and mortgage rates will rise in the next 12 months. The biggest change, though, was in job security numbers, with a 14 percent increase in the number of participants who said they aren’t concerned with losing their job. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says there are a number of reasons Americans may be feeling optimistic. “With the growing likelihood that lockdown restrictions will continue easing as vaccination efforts ramp up, and with warmer weather on the horizon and another round of fiscal stimulus pending … consumers may have good reason to feel more positive about the labor market,” he said. Duncan believes housing and economic attitudes will improve in the months ahead. (source)

It’d be easy to get the impression that buying a house is becoming unaffordable. After all, home price increases only seemed to accelerate after last year’s hot summer market. In fact, one recent report from the National Association of Realtors found that 88 percent of metro areas saw double-digit price gains during the fourth quarter of last year. But despite those price gains, the same report also found that the income required to afford a 30-year fixed-rate mortgage with a 20 percent down payment hadn’t changed all that much from the year before. That’s mostly due to favorable mortgage rates, which have helped keep affordability levels from getting out of reach. So how much money do you need to make to comfortably buy a house in today’s market? Well, the NAR found that you’d need to make $49,908, which is only up slightly from 2019 when it was $48,960. Additionally, their analysis showed that in 71 percent of the included metro areas a family could pay their mortgage with an income of less than $50,000 per year. Of course, where you’re buying matters. For example, that number more than doubles if you want to live somewhere like Los Angeles or Boulder, Colo. And, if you want to live in the San Jose-Sunnyvale area, you’ll need to make almost $225,000 to afford your mortgage comfortably. (source)

The coronavirus caused a shift in home buying preferences. Mitigation efforts led to more Americans working from home, which then caused buyers to look for houses in areas where they could get more space and privacy for their money. Naturally, that shift caused home prices in rural and suburban markets to begin growing at a faster rate – even outpacing prices in urban centers. But, according to one recent analysis, things may be changing. That’s because, for the first time since the pandemic began, prices in cities are once again rising faster than they are in suburban and rural neighborhoods. Why the change? Well, one theory is that there is growing hope that life will soon get back to normal once the coronavirus vaccine has been distributed more widely. That hope, in turn, has caused growing interest in single-family homes in walkable urban areas close to recreation and amenities. So far, the trend has been more pronounced in metros like Baltimore, Detroit, and Cleveland where prices are up nearly 40 percent year-over-year. More expensive cities like New York, DC, and San Francisco, on the other hand, have seen much more modest increases. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes was 2 percent higher last week than it was the week before. It is now 1 percent higher than it was last year at the same time. But while a relatively modest increase isn’t that noteworthy, who was behind it might be. That’s because, the increase may be coming from first-time home buyers – who haven’t been as active in the market the past few years. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the proof is the average loan size. “The housing market is entering the busy spring buying season with strong demand,” Kan said. “Purchase applications increased, with a rise in government applications – likely first-time buyers – pulling down the average loan size for the first time in six weeks.” The average loan amount had been rising, as affordability challenges and the economic impact of the coronavirus caused younger buyers to delay plans to buy. Indications that they may be returning to the market are a positive sign for the spring and summer season. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

If you’re trying to figure out whether or not you can afford something, you typically only have to consider its price. Buying a home, however, is a bit more complicated. When you buy a house, there are variables to consider beyond the list price. You have to take things like insurance and taxes into consideration as well. That’s why, despite the fact that home prices have been rising lately, buying is still a good deal in many markets. How is that possible? Well, it’s mostly due to mortgage rates. According to a recently released analysis from the National Association of Realtors’ consumer website, historically low interest rates have helped keep the median monthly mortgage payment relatively flat over the last year. In fact, the monthly cost to purchase a median priced home increased just 0.2 percent year-over-year, despite double-digit home price growth during the same period. Danielle Hale, the website’s chief economist, says the news is encouraging but conditions can change. “With interest rates expected to rise over the coming months, buyers may need to act sooner than later to take advantage of today’s affordability or be prepared to adjust their target purchase price,” Hale said. (source)