Pending Home Sales Post Record-Setting Rebound in May – According to the National Association of REALTORS®, following two consecutive months of declines, pending home sales came roaring back in May. Every major region of the U.S. posted month-over-month increases, including the South, which also bested its levels from a year ago. Home buyers reemerged, ready to move quickly on purchases as states reopened in May. “This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” says NAR Chief Economist Lawrence Yun. “This bounce-back also speaks to how the housing sector could lead the way for a broader economic recovery.” NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings jumped 44.3% to a reading of 99.6, the highest month-over-month gain in the index’s history dating back to January 2001. An index of 100 is equal to the level of contract activity in 2001. However, overall contract signings are still down 5.1% year over year. “More listings are continuously appearing as the economy reopens, helping with inventory choices,” Yun says. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
Source and link to the full article: National Association of REALTORS®
Mortgage Applications 18% Higher Than Last Year – Based on the Mortgage Bankers Association report recently, homebuyers rushed out to apply for a mortgage. Homebuyer mortgage applications have surged for five consecutive weeks due to pent-up demand from shelter-in-place orders in March and April as well as a demand for more living space as a result of the pandemic. Purchase mortgage volume dropped 3% from last week’s high pace, but remains 18% higher than a year ago. “One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market,” says Joel Kan, MBA’s chief economist. “Additional housing inventory is needed to give buyers more options and to keep home prices from rising too fast.” Despite the low mortgage rates, applications for refinances dropped 12% for the week. However, they are still 76% higher than the same week a year ago, the MBA index shows. Lenders reportedly are not offering their lowest rates to refinancers in order to keep up with the higher volume of traffic coming in from home buyer applicants, CNBC reports.
Source and link to the full article: “Weekly Homebuyer Mortgage Demand Ticks Down But Is Still a Remarkable 18% Higher Than a Year Ago,” CNBC (June 24, 2020)
Home Sellers Are the ‘Missing Link’ in the Recovery – According to realtor.com®’s newly released housing report, the lack of housing inventory continues to be buyers’ biggest hurdle. In June, the number of homes for sale plummeted nationwide, prompting realtor.com® to call home sellers the “missing link” to an otherwise strong summer housing market. The nation’s housing inventory decline has accelerated since May, and housing inventory dropped 27.4% year over year in June. That translates to about 363,000 fewer homes for sale this year. “Our June data reinforces that buyers are out in force and serious about finding a home,” says Danielle Hale, realtor.com®’s chief economist. “Although the new listings trend has improved, inventory continues to decline, indicating that what is coming onto the market is selling.”
Source and link to the full article: realtor.com®
Mortgage Rates Remain at All-Time Low – Based on Freddie Mac reports, the 30-year fixed-rate mortgage stayed at its record low level, offering an opportunity for home buyers to lock in the lowest rate in Freddie Mac’s records dating back 50 years. The 30-year fixed-rate mortgage averaged 3.13% recently. The mortgage market has seen a resurgence in applications for home purchases in recent weeks. “The rebound in purchase demand partly reflects deferred sales as well as continued interest from prospective buyers looking to take advantage of the low mortgage rate environment,” says Sam Khater, Freddie Mac’s chief economist.
Source and link to the full article: Freddie Mac