Walkable neighborhoods with easy access to public transit have traditionally been attractive to home buyers. After all, who doesn’t like the convenience of having the things you need close by? But while convenience is appealing, it’s not the only thing home buyers weigh when deciding where to look for a new house. And after the pandemic upended our daily routines and changed where and how we work, access to transit began to fall from the top of buyers’ wish lists. In short, the pandemic changed home buyers’ priorities too. That helps explain a new analysis showing car-dependent neighborhoods experiencing sharper home-price increases than areas close to transit. In fact, the analysis found the median-sales price in car-dependent areas has increased 32.8 percent since January 2020. In transit-accessible neighborhoods prices have risen 15.6 percent. The disparity is a reflection of how many buyers have chosen privacy, space, and affordability over convenience and transportation since the beginning of the pandemic. Whether or not this trend continues will depend, in part, on how many remote workers are required to return to offices as the economy’s reopening progresses. (source)

With fewer homes available for sale and prices on the rise, it’s a great time to sell a house. And, according to Fannie Mae’s most recent Home Purchase Sentiment Index, more Americans are noticing. In fact, their survey – which tracks Americans’ perceptions of the housing market, buying and selling a home, prices, mortgage rates, and their personal financial situation – found that 77 percent of respondents said they feel like it’s a good time to sell. That’s up 10 percent from last month. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says optimism about buying conditions isn’t as high, but demand should remain strong. “Despite the pessimism in home buying conditions, we expect demand for housing to persist at an elevated level through the rest of the year,” Duncan said. “Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy.” (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates fell last week from one week earlier. Rates were down 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. Rates are now lower than where they were at the same time last year. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says, current conditions are still challenging for buyers. “Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” Kan said. Overall, mortgage application demand fell 1.8 percent from the week before, with purchase activity down 1 percent from the previous week and 14 percent lower than the same week one year ago. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

In this market, homes for sale don’t last very long. Good homes are listed and purchased in a matter of days. In fact, according to new numbers from the National Association of Realtors’ consumer website, properties in June sold 35 days faster than last year and 21 days faster than the average June between 2017 and 2019. Nationally, the typical home was on the market just 37 days – and, in cities like Rochester, Denver, and Nashville, homes sold in two weeks or less. Fortunately, George Ratiu, the website’s senior economist, says relief may be on the way. “The improvement we saw in new listings growth from May to June shows sellers are entering the market historically later in the season, which could mean we’ll see home buying continue into the fall as buyers jump at new opportunities,” Ratiu said. In other words, new listings have been trending higher and it may mean home sellers are returning to the market. If the trend holds – and more homes become available for sale – the market’s current pace will begin to slow and buyers will have more choices and, hopefully, a little more time. (source)

Homeownership is a major financial commitment. Not only does it mean a monthly mortgage payment but it also comes with other expenses like property tax and homeowners insurance that add to the cost. So with home-price increases in the news, it’s natural to wonder whether buying a home is still affordable. ATTOM Data Solutions’ second-quarter 2021 U.S. Home Affordability Report has some answers. The report takes homeownership costs on a median-priced home and wage data from the Bureau of Labor Statistics and compares them to historical averages. The results found 61 percent of counties were less affordable now than they’ve been in the past. However, though more expensive in those counties, homeownership isn’t beyond the average worker’s financial means. Todd Teta, ATTOM’s chief product officer, says it’s still within reach for the average American. “Average workers across the country can still manage the major expenses of owning a home, based on lender standards,” Teta said. “But things have gone in the wrong direction this quarter in a majority of markets as the national housing market boom roars onward.” (source)

The National Association of Realtors’ Pending Home Sales Index tracks the number of contracts to buy homes that are signed each month. The index is considered a good indicator of future home sales, since contract signings typically precede closings by several weeks. In May, pending home sales bounced back after declining in April. In fact, the number of contracts to buy rose 8 percent from the previous month and are now 13.1 percent higher than last year at the same time. The results marked the strongest reading for the month of May since 2005. Lawrence Yun, NAR’s chief economist, said the improvement was a surprise. “May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” Yun said. “The housing market is attracting buyers due to the decline in mortgage rates … and from an uptick in listings.” Contract signings were up in all four regions with the biggest gains found in the Northeast and West. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage rates were volatile last week, with rates up for 30-year fixed-rate loans with conforming balances but down for jumbo loans, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The volatility contributed to decreasing refinance and purchase activity, which both fell from one week earlier. Inventory was also a factor and likely played a role in pushing demand for loans to buy homes lower. Joel Kan, MBA’s senior vice president and chief economist, says current conditions are particularly challenging for first-time buyers. “The average loan size for total purchase applications increased, indicating that first-time home buyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale,” Kan said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)