Americans’ view of the housing market has plateaued, according to the latest results of Fannie Mae’s Home Purchase Sentiment Index. The monthly index is based on a survey that asks participants for their feelings about buying and selling a home, their financial situation and job, and where they think prices and mortgage rates are headed. In August, the index was unchanged from one month earlier. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says market sentiment is divided between buyers and sellers. “From a historical perspective, the current housing market is unusual, as demonstrated in part by the HPSI and its recent plateauing,” Duncan said. “Given the significant home price appreciation and rapid rise in mortgage rates, it is very much a tale of two markets, at least from a consumer perspective.” In other words, the market is good for sellers while, at the same time, challenging for home buyers. Survey results reflect that reality. In fact, the number of respondents who say now is a good time to buy a home remains low but the share of respondents who say it’s a good time to sell increased in August, rising to 66 percent. (source)

ATTOM Data Solutions’ recently released second-quarter 2023 U.S. Residential Property Mortgage Origination Report shows the total number of residential mortgages secured during the second quarter increased 21 percent from the first quarter. The quarter-over-quarter increase – which includes purchase, refinance, and home-equity lending – was the first in two years. The improvement was led by purchase loans, which made up about half of all mortgages issued, with refinance packages making up a third and home-equity loans just under 20 percent. Rob Barber, ATTOM’s CEO, says the data shows the housing market’s continued strength. “Lenders certainly aren’t anywhere near as busy as they were back in 2021,” Barber said. “And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country.” Increases in residential mortgages were seen in 95 percent of the country, marking the first gains following eight consecutive quarterly declines. (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, 15-year fixed-rate loans, and 5/1 ARMs. The drop wasn’t enough to boost demand for mortgage applications, though. Joel Kan, MBA’s vice president and deputy chief economist, says purchase and refinance activity were both down last week. “Both purchase and refinance applications fell … as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” Kan said. “The 30-year fixed mortgage rate decreased … but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

Options are important for home buyers. If you’re looking for a house to buy, having many homes to choose from is ideal for a couple of reasons. First, it raises the odds you’ll find one that fits your needs and checks the boxes on your wishlist. Secondly, a better balanced market, where the number of buyers and available homes are closely matched, means stable prices and less competition. In other words, an increasing number of homes for sale is good for home buyers – especially in a market low on homes. That’s the case today. The inventory of homes actively for sale is currently down 30-to-60 percent from pre-pandemic levels. But fortunately for prospective home buyers, one new analysis found the number of newly listed homes for sale saw a summer bump, climbing 3.5 percent from July to August. That’s an encouraging step in the right direction. It also puts new listings just 7.5 percent lower year-over-year, after being down 20.8 percent in July. (source)

Nationally, home prices rose nearly 5 percent during the first half of 2023, according to new numbers from the S&P Case-Shiller Home Price Index. That’s a far smaller increase than has been seen over the past few years but is still faster than the historical median full-year increase. In other words, home prices are still rising, not as fast as they were in 2021, but faster than typical. Craig J. Lazzara, managing director at S&P, says the outlook is optimistic. “With 2023 half over, the National Composite has risen 4.7 percent, which is slightly above the median full calendar year increase in more than 35 years of data,” Lazzara said. “We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results.” S&P’s price index is considered among the leading measures of U.S. home prices and has been tracking home values for more than 35 years. (source)

After a contract to buy a home is signed, that home’s sale is considered pending until it closes weeks later. Because signings precede closings by several weeks, they are considered a reliable indicator of future home sales. That’s why the National Association of Realtors tracks them each month. In July, the NAR’s Pending Home Sales Index found contract signings up 0.9 percent from the month before. It was the second consecutive month of gains. Lawrence Yun, NAR’s chief economist, says the improvement is a sign that buyer demand remains strong, despite current market challenges. “The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” Yun said. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.” (source)