When mortgage rates spiked last year, many potential home buyers put their plans on hold. But hesitant home buyers may want to rethink their position now that the winter housing market has seen mortgage rates fall a full percentage point from where they were last November. After all, newly released research shows the decline means up to 3 million more Americans can now afford a $400,000 loan. Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, says lower rates have opened up the market to a growing number of potential buyers. “There is finally light at the end of the tunnel for many Americans, as they now earn more than the income needed to purchase a mid-priced home,” Evangelou said. “Many Americans earn about $5,000 more annually than the qualifying income needed to purchase a home.” Evangelou believes, with inflation improving and the Fed indicating smaller rate increases in the future, the improvements should hold and keep mortgage rates steadier in the months ahead. (source)

It’s been a long time since home buyers had much negotiating power. Conditions have favored sellers for years now. But a combination of rising inventory and higher mortgage rates began to turn some markets last year. Now, it’s 2023, and one new analysis says home buyers may gain some ground by year’s end. The analysis – which looked at the 100 largest housing markets in the country to determine which favor buyers, which favor sellers, and which are neutral – found a rising number of markets where buyers are seeing improved conditions. Overall, 13 markets favored buyers, 43 were neutral, and 44 favored sellers. But, if things play out as expected, those numbers will change even further by summer. Expectations are that the spring market will remain challenging, with inventory still low and buyer activity increasing. But, as the year goes on and the number of homes for sale rises, home buyers will find more favorable conditions, particularly into summer and early fall. By the end of the year, 34 markets are forecast to be buyers’ markets. (source)

Equity is the difference between what your home is worth and what you owe on your mortgage. And these days, homeowners have a lot of it. In fact, according to ATTOM Data Solutions’ most recent U.S. Home Equity & Underwater Report, nearly 50 percent of mortgaged properties were considered equity rich at the end of last year. That means the combined amount of loan balances secured by those properties was no more than 50 percent of their value – which is another way of saying the property is worth a lot more than what its owner owes on it. That’s a good situation to be in and, these days, most homeowners are doing pretty well. According to the report, a full 94 percent of homeowners have, at least, some equity in their home. Bob Barber, ATTOM’s CEO, says, the past few years have been good for building equity but the gains are likely to slow. “[It] depends on a lot of factors, including where interest rates go,” Barber said. “But, for now, it looks like the run up in wealth flowing from owning homes has stalled along with the market.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down for 30-year fixed-rate loans with conforming balances, loans backed by the Federal Housing Administration, 15-year fixed-rate loans, and 5/1 ARMs. It was the fourth consecutive week mortgage rates improved. Joel Kan, MBA’s vice president and deputy chief economist, says home buyers are regaining purchasing power. “Purchase activity is expected to pick up as the spring home buying season gets underway, bolstered by lower rates and moderating home-price growth,” Kan said. “Both trends will help some buyers regain purchasing power.” But while mortgage rates have fallen almost 40 basis points over the past month, demand for loans to buy homes remained slow last week, falling 10 percent from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The S&P Case-Shiller Home Price Index is among the most closely watched measures of U.S. home prices. The index, which tracks both monthly and annual changes in home values, has been collecting data for nearly 30 years. According to the most recent release, home prices continue to slow in metro areas across the country. Craig J. Lazzara, managing director at S&P, says November marked five consecutive month-over-month declines. “November 2022 marked the fifth consecutive month of declining home prices in the U.S.,” Lazzara said. “ These declines, of course, came after very strong price increases in late 2021 and the first half of 2022. Despite its recent weakness, on a year-over-year basis the National Composite gained 7.7 percent, which is in the 74^th percentile of historical performance levels.” Regionally, year-over-year gains were not evenly distributed, with West Coast cities seeing smaller increases than cities in the South where prices continue to see double-digit gains from year-before levels. (source)