Pandemic-related lockdowns made many Americans want more space. So when home buyers came back to the market, sales in the suburbs heated up. Buyers wanted bigger homes, larger yards, more privacy, and room for a home office. That trend continued throughout the pandemic. But now that things have opened up and fewer of us are working remotely, has the push for suburban and exurban homes died down? Well, one measure can be found in a recent report from the National Association of Home Builders. According to their Home Building Geography Index – which tracks where new homes are being built – residential construction has slowed in nearly all markets but particularly in large suburban areas. Robert Dietz, NAHB’s chief economist, says some of that is because of material costs but it’s also due to a shift in buyer preferences. “The more pronounced drop in growth for the large suburban markets is due to the easing of the rapid shift of home buyer preferences for the suburbs in the aftermath of the COVID-19 pandemic,” Dietz says. In other words, slower new home construction in the suburbs could be an early sign that buyer preferences are starting to shift back to pre-pandemic norms. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week from one week earlier. Rates were up for 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 was the first in three weeks. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says both refinance and purchase activity slowed as a result. “While rates were still lower than they were four weeks ago, they remain high enough to still suppress refinance activity …” Kan said. “The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past month. These worsening affordability challenges have been particularly hard on prospective first-time buyers.” Overall, mortgage application demand was down 6.5 percent from one week earlier. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Fannie Mae’s monthly Home Purchase Sentiment Index measures how Americans feel about the housing market and economy. It asks respondents whether they think it’s a good time to buy or sell a house, whether they believe home prices and mortgage rates will rise or fall, and how they feel about their job and financial situation. In May, the index was relatively unchanged from the month before but saw an increase in the number of participants who said they think now is a good time to sell a house. In fact, 76 percent of survey respondents said they feel the market is right for sellers. Buyers, on the other hand, didn’t fare as well. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says Americans are feeling pessimistic about buying. “Respondents’ pessimism regarding home buying conditions carried forward into May, with the percentage of respondents reporting it’s a bad time to buy a home hitting a new survey high,” Duncan said. That pessimism is due, in part, to recent mortgage rate increases. But while spiking rates may have dampened buyer optimism, respondents don’t expect them to continue. Survey results show an increasing share of participants who said they think rates will fall in the coming months. (source)

The number of homes for sale has been lower than normal for years now. Home shoppers looking for a home to buy have had to compete over limited listings, which has led to bidding wars, rising prices, and frustration. But things may finally be changing. In fact, the number of active listings rose in May for the first time in three years, according to the National Association of Realtors’ consumer website. The national inventory of active listings increased 8 percent year over year, with newly listed homes up 6.3 percent. That’s the first year-over-year improvement since June 2019. It’s also encouraging news for home buyers, who have been dealing with a fast-paced market and challenging affordability conditions since the pandemic sent already low inventory even lower. But while the gains are welcome news, it’s only a start. Which means, though listings are improving, challenges remain. Inventory is still lower than normal, home prices are still up, and listings continue to sell quickly. In other words, the tide may be turning but, for now, home buyers still have to be prepared. (source)

Calculating how much house you can afford can be difficult. Not only do you have to take your budget and lifestyle into account, you also have to keep up on changes in the housing market. That’s particularly tricky these days. Quickly changing affordability conditions mean potential buyers have to regularly recalculate costs when considering which available homes are a good financial fit. Fortunately for home shoppers wondering about their potential costs, the Mortgage Bankers Association keeps a monthly measure of typical mortgage payments based on loan application data. In April, the data shows payments rose $153 from March, due mostly to higher mortgage rates. The median payment applied for by April applicants was $1,889, with FHA loan applicants seeing the most affordable payments at $1,374. Edward Seiler, MBA’s associate vice president of housing economics, says affordability conditions have become more challenging since the start of the year, but noted that “… prospective home buyers should start to see moderation from the double-digit price appreciation reported for well over a year in most of the country.” (source)

Every homeowner with a home to sell wants to attract qualified buyers. After all, the more interest there is in your home, the more likely it is that you’ll get a good offer. One way to measure interest is to pay attention to how many buyers are scheduling showings to tour your house. But how many showings does a listing typically see? Well, according to one recent analysis, the nationwide average number of showings per listing was 8.49 in April. In the top 25 markets, though, the average was closer to 15. Of course, a lot depends on the home you’re selling and its location. For example, showings have slowed this spring compared to last year’s competitive pace, but some regions have seen a bigger drop in activity than others. Wherever you are, though, there are bound to be buyers. Even in an unusual spring market, where mortgage rates and low inventory have dampened demand, there were still more than 100 markets in April averaging double-digit showings per listing. (source)

According to the Mortgage Bankers Association’s most recent Weekly Applications Survey, average mortgage rates fell for the fourth time in five weeks last week. Rates were down from the week before for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA’s associate vice president of economic and industry forecasting, says there are a few factors behind the decline. “Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower,” Kan said. Lower rates didn’t boost buyer demand, though. In fact, demand for loans to buy homes fell 1 percent from the week before and is now 14 percent lower than last year at the same time. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)