High mortgage rates, tight supply, and economic uncertainty
Based on Black Knight’s latest update, home prices are softening in most markets across the nation. Yet home prices are still higher compared with a year ago, and it’s unlikely they will fall too steeply. The sharp rise in mortgage rates over the past several months has made housing more expensive for anyone needing a loan. While that has some buyers pulling back, and some sellers lowering what they’re asking for, strong demand and tight supplies are supporting prices. Recent reports are using monthly comparisons because of the sharp turnaround in the once-hot, pandemic-driven housing boom.
Source and link to the full article: What's happening with home prices? Mortgage rates, tight supply are factors (cnbc.com)
New Home Sales Post Sharp Increase in August, Defying Expectations
According to the Census Bureau and the Department of Housing and Urban Development, the surprise suggests buyers took advantage of a dip in mortgage rates and increased inventory. New home sales rose a surprising 28.8% in August from a month earlier, a contrast to the broader narrative of a housing market slowdown. After a 12.6% decline in July, economists had expected another slight downturn in the pace of annual sales, which came in at 685,000 instead of the 500,000 or so expected. The median price of a new home, meanwhile, was $436,800. “In a surprise turnaround from recent months, new home sales surged to their highest level since March,” said Lisa Sturtevant, chief economist at Bright MLS. “Sales were up 28.8% compared to July, the biggest monthly increase since June 2020,” she added. “In August, the median price of a new home sold was $438,000, which fell 0.3% compared to July.”
Source and link to the full article: New Home Sales Post Sharp Increase in August, Defying Expectations | Economy | U.S. News (usnews.com)
FHA plans to revamp its 203k renovation program
Based on the Federal Housing Administration (FHA) announcement that in the next 90 days they will issue a request for information from the public to update its 203K program, a step to address the current affordability crisis by boosting the supply of homes. “We’re looking at revamping the 203k program,” Julienne Joseph, deputy assistant secretary in the Office of Single-Family Housing for FHA at the U.S. Department of Housing and Urban Development (HUD) said recently during the 2022 HousingWire Annual event held in Scottsdale, Arizona. According to Joseph, homes needing renovation can be “daunting,” especially for first-time homebuyers looking for something that is turnkey. In the case of FHA borrowers, she said that, among the many properties available, 35 or 40-year-old homes would be a good fit, but borrowers just don’t know how to get the loan to fix it. “For years, we’ve all discussed how we make this program better. We’re in the process of developing a RFI (request for information) that we are going to put out to the industry because we want to be able to address it once and for all.” The FHA’s perception is that the rules for the 203K program need to change to make it more similar and as popular as Fannie Mae’s Homestyle program for conventional borrowers.
Source and link to the full article: FHA plans to revamp its 203k renovation program - HousingWire
Home price growth to slow drastically next year
According to CoreLogic’s recent report predicting much smaller yearly home price growth moving forward even as home prices continued to post strong year-over-year growth in August, rising 13.5% for the 127th consecutive month of annual gains. August’s double-digit yearly increase is the lowest year-over-year appreciation since April 2021 and it marks the fourth straight month of slowing price growth, according to the data and analytics firm’s Home Price Insights report published recently. The CoreLogic HPI Forecast also indicates that home price will increase just 3.2% year-over-year from August 2022 to August 2023. CoreLogic stated that the month-over-month decrease in August and its modest HPI forecast reflects the cooling homebuyer demand due to rising mortgage rates.
Source and link to the full article: Home price growth to slow drastically next year - HousingWire