Gen X, Millennials Likely to Keep Home Buying Strong for Years to Come – According to the CoreLogic Insights Blog, between 2018 and 2028, the number of households is projected to increase by up to 12 million. Generation X and millennials are expected to drive most of that household formation. As they replace dropped households over that time, the two generations could add nearly 25 million new households by 2028. The largest cohort of millennial buyers have yet to surface on the market, researchers note. That segment, from ages 28 to 30, numbers nearly 15 million and is approaching the average age to buy a first home, 33 years old, CoreLogic reports.
Source and link to the full article: “Affordability Challenges Ahead: Large Demographic Tailwind Has Arrived Amid Lowest Inventory of Homes for Sale,” CoreLogic Insights Blog (Dec. 29, 2020)
Builders Struggle to Keep Up With Demand – Based on the latest new-home sales data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, new-home sales decreased from October to November as high buyer demand and several building headwinds continued to press on builders’ ability to catch up. Sales of newly built single-family homes dropped 11% in November compared to the previous month. Despite the monthly dip, new-home sales are still 20.8% higher than a year ago. “Though the market remains strong, the pace of sales pulled back in November as inventory remains low and affordability concerns persist as builders grapple with a shortage of lots, labor, and building materials,” says Chuck Fowke, chairman of the National Association of Home Builders. “The home building industry saw a historic gap between the pace of new-home sales and construction of for-sale single-family housing this fall,” adds Robert Dietz, the NAHB’s chief economist. “As a result, the pace of new-home sales was expected to slow to allow construction to catch up. This appears to have occurred in November as inventory of completed, ready-to-occupy new homes was down 43% compared to November 2019 at just 43,000 homes nationwide.”
Source and link to the full article: National Association of Home Builders
Contract Signings Surge to Record High for November – According to the National Association of REALTORS®’ Pending Home Sales Index, real estate pros are quickly submitting offers for clients as the buyer frenzy, unusual for the winter season, continues. Sales have slowed slightly from the high levels recorded this fall. Pending home sales slid in November by 2.6% compared to those in October. November’s decline marked the third consecutive month for monthly decreases in pending home sales. “The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” says Lawrence Yun, NAR’s chief economist. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.” Pending home sales are still up 16.4% compared to a year ago. All major regions are posting double-digit year-over-year increases. “The market is incredibly swift this winter with listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun says.
Source and link to the full article: National Association of REALTORS®
Mortgages Are Taking Longer to Close – Based on Ellie Mae’s Origination Insight Report, mortgages are now taking an average of nearly two months to close as lenders face a surge in business spurred by low mortgage rates and high demand. The average time it took a mortgage to close in November was 55 days. The 55-day average wait is proving problematic for borrowers who might lock in their mortgage rate for a 30-day or 45-day period. The rate lock will hold a low mortgage rate for a specified time. But if it expires before a buyer closes, buyers could get stuck paying a higher interest rate on their mortgage or have to pay another fee to extend their rate lock, The Motley Fool reports. “A big reason why mortgages have been delayed lately is volume,” The Motley Fool reports. “Low interest rates are fueling demand for new home purchases and refinances, and mortgage lenders are incredibly busy trying to keep up with everyone.”
Source and link to the full article: “The Average Mortgage Now Takes Almost 2 Months to Close,” The Motley Fool (Dec. 26, 2020) and “REALTORS® Confidence Index: November 2020,” National Association of REALTORS® (November 2020)