Shrinking Home Prices Led to More Sales in August - Industry Outlook

By Troy Van Every | September 26, 2022 | Mortgage

Mortgage Rates Top 6% for First Time Since 2008

According to Freddie Mac, the interest rate for the 30-year fixed-rate mortgage crossed a major threshold recently, hitting 6.02%, the first time it has broken 6% since 2008. Volatile mortgage rates are sending shockwaves through the housing market and unnerving home buyers who are concerned about shrinking affordability. The 30-year loan averaged just 2.86% a year ago. The increased rates have pushed monthly mortgage payments 60% higher year over year, says Nadia Evangelou, senior economist, and director of forecasting for the National Association of REALTORS®. “There is no doubt that these higher rates hurt housing affordability,” Evangelou writes on the association’s blog. Mortgage rates already marked a grim milestone when they hit 5.7%, a rate that puts a median-priced home out of reach for the typical household.

Source and link to the full article: Mortgage Rates Top 6% for First Time Since 2008 | Realtor Magazine

Shrinking home prices led to more sales in August

Based on Remax reports, August's average accepted offer on a single-family property was one percentage point below the list price, which drove a month-to-month increase in home sales. The real estate franchisor's National Housing Report looked at 51 metro areas and found August's close-to-list price ratio of 99% was down from 101% in July and 102% for August 2021. Sales for the month were 5.3% higher than in July as the median price of $410,000 was 2.4% lower over the same period, rewarding "patient buyers," Nick Bailey, Remax president and CEO said in a press release. "Sales increased as buyers 'bought the dip' which was not the trend many people were expecting."

Source and link to the full article: Shrinking home prices led to more sales in August | National Mortgage News

Builders are Cutting Prices, Adding Incentives as Confidence Wanes 

According to The National Association of Home Builder’s (NAHB’s) index measuring the confidence of builders in the new home market has fallen for the ninth straight month. A 3-point month-over-month drop put the NAHB/Wells Fargo Housing Market Index (HMI) at 46 in September. NAHB’s chief economist Robert Dietz said, except for the period immediately after the onset of the 2020 pandemic, the index was at its lowest point since May 2014. The continuing decline in the index is another sign that elevated interest rates, persistent building material supply chain disruptions and high home prices are combining to take a toll on affordability, Dietz said. The HMI is projecting an ongoing decline in the volume of single-family housing starts.

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VA home loan bill could open door to more virtual appraisals

Based on a Veterans Affairs announcement, VA loans could become available without needing an in-person property appraisal. A bill passed by the House recently directs the Department of Veterans Affairs to change its policies around appraisals of properties against which it provides loans. These changes include provisions for so-called "desktop appraisals" in which properties are reviewed virtually rather than in person and waivers of appraisals altogether. H.R. 7735, also known as the Improving Access to the VA Home Loan Benefit Act of 2022, is the latest government initiative aimed at addressing the national undersupply of home appraisers and the issues it is creating in the mortgage industry.

Source and link to the full article: VA home loan bill could open door to more virtual appraisals | National Mortgage News