Fewer First Time Homebuyers are Competing for Homes

Bob Vaughan

From June to July existing-home sales increased by 2% according to a report from the National Association of Realtors. Year-over-year there was a 1.5% increase in completed transactions of single-family homes, townhomes, and condominiums. After having 12+ months of low inventory, the availability of unsold homes in the market rose 7.3% from June to July. As more and more sellers enter the market, the hope of leading economists is that it will level the playing field for homebuyers moving forward. First time homebuyers may still feel a bit priced out of the market as the median existing home sales price rose to $359,900 in July, up from $305,600 last year. This 17.8% increase in price seems to be pushing some buyers out of the market. NAR released a report recently stating that 30% of sales in July were completed by first time homebuyers compared to 34% this time last year. Adding more inventory and having purchase prices stabilize should allow new buyers to be more comfortable in today’s market.

Mortgage Application Volume Slips

Bob Vaughan

In the week ending August 27th, mortgage application volume dropped 2.4% according to a report from the Mortgage Bankers Association. The level of refinance application activity saw a big decrease specifically falling 4%. Overall refinances made up only 66.8% of total mortgage application volume, down 0.5% from the previous week. Even in today’s extremely low rate environment, borrowers are still waiting for rates to get even lower.

 

  • The FHA share of mortgage application volume was 11.2%, up from 11% the week prior.

As Job Numbers Rise, Mortgage Application Volume is Up

Bob Vaughan

In the week ending August 6th, mortgage application volume saw a 2.8% rise according to a report from the Mortgage Bankers Association. The previous week the U.S. Labor Department released a report stating 943,000 new jobs were added in July, the highest month-over-month growth since August 2020. During this period, refinances made up over 68% of total mortgage applications.

 

  • The FHA share of mortgage application volume dropped to 8.9% from 9.0% the previous week.
  • The VA shares of mortgage application volume dropped to 9.6% from 9.9% the previous week.

The FHA and FHFA Decide to Continue Eviction Ban

Bob Vaughan

On July 30th, one day before the ban was to expire, The FHA and FHFA decided to extend the ban on evictions of borrowers with foreclosed properties until September. The same day more than a dozen real estate trade associations reached out to the Senate, HUD, and the U.S. Treasury asking them to not to consider extensions of the eviction ban. Most of the nations 44 million rentals are owned by private companies with complex financing scenarios. Because of this the government has a much harder time controlling the rental markets as opposed to the single-family housing market. This eviction ban extension applies specifically to the stock of foreclosed or real estate owned properties belonging to the FHA and FHFA.

Refinancing Your Home Gets Cheaper

Bob Vaughan

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Fee for loan deliveries effective August 1st. The 50-basis point fee previously being required from lenders will be removed, allowing families to save more money in today’s low rate environment. The elimination of this fee was the number one change that the mortgage industry had been asking the federal regulatory agency to make. The FHFA had begun charging this adverse market fee on refinance mortgages last year to mitigate risks and costs to the agency because of COVID-19. Some believed this fee was simply a way for Government Sponsored Entities (Fannie Mae and Freddie Mac) to increase cashflow during record levels of refinance volume. Either way, the removal of this fee and the increased cash savings of refinancing are benefiting home owners everywhere.

Mortgage Applications Spike as Rates Drop Again

Bob Vaughan

For the week ending in July 23rd, mortgage application volume increased 5.7%. According to a report from the Mortgage Bankers Association, the 30-year fixed mortgage rate hit it’s lowest levels since February and the 15-year fixed rate fell to a record low. These rate drops brought a wave of refinance activity, making up 67.2% of new mortgage application volume. Also of note, the FHFA reported that May home prices were up 18% year-over-year, showing how some buyers could feel price pressuring them out of the market.

 

  • The FHA share of total mortgage application volume dropped to 9.1% from 9.6% the previous period.
  • The VA share of total mortgage application volume dropped tp 9.8% from 10.5% the previous period.

Applications for New Mortgages Drop This Past Week

Bob Vaughan

The week ending in July 16th saw a drop in mortgage application volume according to a report from the Mortgage Bankers Association. The 4% volume decrease came this past period after a previous weekly gain of 16% following mortgage rates dropping. Limited inventory and high prices are still keeping some potential homebuyers out of the market. Refinance applications made up 64.9% of total application volume, increasing by .8% since the last weekly period.

 

  • The FHA share of total mortgage application volume increased from 9.5% to 9.6% this past week.
  • The VA share of total mortgage application volume increased from 10.3% to 10.5% this past week.

Mortgage Application Slide Week Ending July 2nd

Bob Vaughan

According to a report from the Mortgage Bankers Association, mortgage application volume fell 1.8% the first week of July. This decline marks the lowest level of new mortgage application volume since January 2020. The applications being filled out for new mortgages are seeing higher requested loan amounts, but fewer applications are coming in. Refinances are making up 61.6% of total mortgage applications, down .3% from the previous week.

 

  • The FHA share of total mortgage applications remained at 9.8%.
  • The VA share of total mortgage applications increased to 10.8%, up .3% from the previous week.

First Time Home Buyer Tips

Bob Vaughan

With today’s housing environment, you’re going to see a lot of competition when putting in an offer for a purchase. Having all of your metaphorical ducks in a row before you put in your offer should make you ready to make decisions involving purchasing a home.

  1. Get your credit score and down payment together. Having a strong credit score will help ensure you qualify for a mortgage for your home purchase and help you receive a more favorable rate. Having your down payment saved will allow you to put more money down on your home and possibly avoid paying PMI.
  2. Get preapproved for a mortgage. Knowing what homes are in your price range will eliminate wasting time looking at homes you can’t afford.
  3. Choose a great Realtor. Pick an agent who has experience with the market you’re looking in.
  4. Understand the mortgage process. While you may not need to know the minor details of the entire process, knowing your timeline and what documents you will need to provide will help save you time and stress worrying you may be forgetting something.

Existing Home Sales Dip Again

Bob Vaughan

For the fourth month in a row, sales of existing homes have dropped according to a report from the National Association of Realtors. The main factor behind the volume of existing home sales dropping is that the inventory of homes for sale continues to dwindle. This low inventory is causing median existing-home prices to rise (23.6% from May 2020 to May 2021) pricing some buyers out of the market. Region by region. the Midwest saw an increase in existing home sales month-over-month, but the Northeast, South, and West fell by 1.4%, .4%, and 4.1% respectively. Year-over-year each of these regions saw a double digit rise in existing home sales. As home builders rush to build on already purchased lots and materials to build remain tough to find, existing home sales may see a bounce back in the next few months.