2020 has been good to the home mortgage industry so far. According to an article published last week by CNBC.com, “Total mortgage application volume surged 30.2% last week from the previous week”. Mortgage companies not only saw an influx of refinance applications, but also an unseasonably high number of home purchase applications.
Interest rates dropped to the lowest level since fall of 2019 and, as a result, refinance applications surged. In fact, according to the article written by Diana Olick, “Those applications jumped 43% for the week and were 109% higher than a year ago. The refinance share of mortgage activity increased to 62.9% of total applications from 58.9% the previous week.”
However, home purchase applications pulled in some impressive numbers, especially considering the housing market typically doesn’t pick up until February. The volume of home purchase applications came in at the highest tally since October of 2009.
Unfortunately, this high demand for homes is met with a very low supply of homes. With a continued supply and demand mismatch, prices could soar and leave some prospective home buyers priced out of the market.
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Photo Credit: Gerd Altmann
As 2019 comes to a close, the trends of the real estate market for the past year are being reviewed an analyzed. However, just as it is with all new beginnings, there is also much anticipation and speculation about what 2020 will bring for real estate professionals, home owners and potential homeowners. Unfortunately, some real estate experts are not seeing much change in the low housing inventory trend in the coming year.
In an article published by Forbes, written by Aly J Yale, Yale states, “…According to the 2020 National Housing Forecast from Realtor.com, the national housing shortage will continue in the New Year, possibly reaching “a historic low level.” Inventory growth is absent in nine out of ten markets, down from a much more optimistic two of three markets seeing growth at the beginning of 2019.
Contributing to the problem, homeowners are remaining in their homes longer, averaging 13 years. Additionally, although home construction has seen growth, most of the new homes are “upper-tier” homes. This leaves entry home buyers little supply in contrast to the large demand. With homes for sale in the lowest price tier down 10 percent through 2019.
Some positive news to look forward to are the anticipation of mortgage rates remaining low and home prices remaining steady, maybe declining in some markets.
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Photo Credit: Mark Moz
The end of 2016 is just a matter of weeks away and, just as we have come to expect this time of the year, real estate analysts have begun making predictions about what could be in store for the 2017 real estate market. Many of these professionals and experts have similar expectations for the upcoming new year; some are based on anticipated changes that may be be ushered in as our new president takes office in January.
Housingwire.com journalist, Kelsey Ramirez, published a list of predictions made by Zillow. Among the expectations for the 2017 real estate market that made this list: increased development of smaller homes located closer to urban areas with access to public transportation, an increased of number of millennials purchasing homes, an increase in the affordability of renting, and an increase in the cost of building homes.
Another Housingwire.com article written by Ben Lane details some predictions made by Redfin. Lane indicates, “according to a new report from Redfin, homes will fly off the market in 2017, faster than any other year on record.” Another prediction on the Redfin list is an expectation that the housing market growth will continue, but at a slower pace than we saw in 2016. The company also predicts an increase in mortgage rates, yet do not expect a significant increase.
Read the entire article and find links to additional 2017 predictions.