The Mortgage Bankers Association’s Mortgage Credit Availability Index measures how easy or difficult it is for prospective borrowers to get approved for a mortgage. When credit availability is tight, it is harder to get a mortgage. When credit loosens, it means lending standards have eased. In March, the index rose 0.6 percent, indicating that mortgage credit has become more available. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says the economy and job market are making it easier for buyers to qualify. “Credit availability inched higher in March, driven by the ongoing economic and job market recovery,” Kan said. “This has increased the amount of of low credit score and high LTV products.” That means, home buyers with less-than-perfect credit scores and smaller down payments will have a better chance at getting approved for a loan. That’s good news, especially since first-time home buyers are expected to make up a significant share of this year’s demand for homes. (source)

When there are more home buyers than homes for sale, that’s a seller’s market. Homeowners can get top dollar for their homes, since buyers have fewer options to choose from. That’s the case in today’s market. And, according to Fannie Mae’s most recent Home Purchase Sentiment Index, Americans are noticing. In fact, the survey component measuring whether respondents think it’s a good or bad time to sell a house saw a 13 percent increase in participants who said now is the right time to sell. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says Americans are becoming more optimistic and it’s pushing home-selling sentiment higher. “The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring home buying season began – perhaps with even more intensity this year, since 2020’s spring home buying season was limited by virus-related lockdowns,” Duncan said. “Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from the week before. 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. The increase brought rates to their highest point since last June. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said rising rates led to a slowdown in mortgage application demand. “The return of rates to the highest level since last June contributed to a slowdown in applications for both purchases and refinances,” Kan said. “The rapidly recovering economy and improving job market is generating sizeable home buying demand, but activity in recent weeks is constrained by quicker home-price growth and extremely low inventory.” Overall, application demand was down 5.1 percent week-over-week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

When shopping for a home to buy, most buyers look at multiple options before making an offer. It’s not likely that the very first house you see will check every box on your wishlist. Which is why the current market’s inventory problem is an issue for buyers. In addition to higher prices, bidding wars, and competition, a lower-than-normal number of homes for sale also means fewer options for home shoppers. And, according to one new report from the National Association of Realtors’ consumer website, homes for sale fell even further in March. In fact, the number of homes available for sale was down 52 percent from last year at the same time. Danielle Hale, the website’s chief economist, says inventory is low but more sellers should be on the way soon. “In many areas of the country, there are half as many available homes for sale than a year ago – and in some markets that number increases to less than one third,” Hale said. “We expect to see more sellers emerge in the weeks ahead, which should give buyers more options.” (source)

One of the primary purposes of a house is protection from the elements. After all, we all want to feel safe at home – and shelter from harsh weather is a big part of that. But how many home buyers are thinking about extreme weather conditions when looking at listings? Well, according to one new survey, quite a few. In fact, nearly 80 percent of participants said the frequency and intensity of extreme weather in an area would make them hesitant to buy a home there. And, among respondents who said they planned to move in the next year, almost half said extreme temperatures and natural disasters played a role in their decision to relocate. Of course, how likely you are to factor extreme weather conditions into your buying decision has a lot to do with where you’re looking to buy. For example, fewer respondents in the Midwest were thinking about extreme weather than in other regions. Similarly, younger buyers were more likely to take environmental factors into account when shopping for a house to buy. (source)

Home prices have been increasing for a while now. But that doesn’t necessarily mean homeownership is unaffordable. In fact, according to a recent report from ATTOM Data Solutions, buying a home in today’s market is still more affordable than historical averages in 52 percent of counties. That means, a majority of the country’s housing stock is within reach. Todd Teta, ATTOM’s chief product officer, says low mortgage rates have helped. “The past year certainly has been an odd one for the U.S. housing market,” Teta said. “Home prices surged at a remarkable pace even as the virus pandemic damaged the U.S. economy, which dropped historical affordability levels. But average workers untarnished by the pandemic were still able to afford the typical home because wages and rock-bottom interest rates worked to their favor in a big way.” The report determined affordability by calculating the amount of income needed to pay homeownership expenses on a median-priced home and comparing it to average wage data. Among the 552 counties included in the report, counties in the Chicago, Houston, Dallas, San Antonio, and Detroit area were the most affordable. (source)

The National Association of Realtors’ Pending Home Sales Index measures the number of contracts to buy homes that are signed each month. Because contract signings precede closings by several weeks, the index can be a good predictor of future home sales numbers. In February, the NAR found pending home sales down 10.6 percent from the month before but virtually unchanged from where they were one year earlier. Lawrence Yun, NAR’s chief economist, says the month-over-month decline is mostly due to the fact that there are too few homes for sale. “The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift but contracts are not clicking due to record-low inventory,” Yun said. “Potential buyers may have to enlarge their geographic search areas, given the current tight market.” Fortunately, Yun says recent mortgage-rate increases don’t appear to have affected prospective home buyers. And, with the spring market just beginning, homes for sale should start to pick up, which will help bring balance to the market and slow price increases. (source)