Existing-Home Sales Reach Highest Point Since 2006 – Industry Outlook

By XINNIX | August 1, 2022 |

Over 5M Borrowers Missed Refinancing Savings – According to Black Knight data, the number of owners who can save by refinancing is down by more than half from the start of this year to 5.9 million. Black Knight considers refinance candidates as 30-year mortgage holders who have a maximum 80% loan-to-value ratio, a credit score of 720 or higher, and a likelihood of reducing their current first lien by at least 0.75%. The average 30-year fixed-rate mortgage has climbed by about 50 basis points in the first weeks of the year. Still, even with recent mortgage rate increases aside, many of those 5.9 million borrowers could still see savings of $275 a month per borrower, according to Black Knight. More than 1 million of them could save at least $400 a month, and 661,000 borrowers could trim $500 or more from their monthly mortgage at current rates.

Source and link to the full article:  “More than 5 Million Borrowers Just Missed Their Chance to Save on a Mortgage Refinance,” CNBC (Jan. 21, 2022)

New-Home Buyers Taking on Supersized Loans – Based on the Mortgage Bankers Association reports, applications to purchase new homes remain skewed toward higher-priced homes. The average loan size for a new home soared to a record high last month, reaching $423,102. That marks an increase from $414,114 in November on new-home loan sizes. Higher sales prices are following higher building costs. They’re also sidelining the buyers who are priced out of a new home. Mortgage applications for new-home purchases fell 5% in December 2021 compared to November and are down by 7.1% from December 2020. “Applications to buy a new home slowed in December, while the activity remains tilted to higher-priced homes,” says Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “Supply chain challenges, labor shortages, and higher materials costs also contributed to last month’s decline, as projects were delayed or cost more to complete.”

Source and link to the full article:  “MBA Says New Home Sales Tilting to Higher Priced Properties,” Mortgage News Daily (Jan. 21, 2022)

Existing-Home Sales Reach Highest Point Since 2006 – According to the National Association of REALTORS®, existing-home sales ended 2021 on a high note as home buyers rushed to buy a home to take advantage of ultra-low mortgage rates. Overall, sales were up 8.5% in 2021 compared to 2020. But the new year could bring about lower sales numbers as more buyers become priced out and find fewer and fewer choices of homes for sale. The signs of a slight slowdown are already popping up. In December 2021, while unsold existing homes fell to an all-time low, home sales also dropped. Total existing-home sales that include single-family homes, townhomes, condos, and co-ops—fell 4.6% in December compared to November, NAR reports. Each of the four major regions of the U.S. posted month-over-month and year-over-year declines.

Source and link to the full article:   National Association of REALTORS®

Can New-Home Starts Maintain 2021 Highs? – Based on the Commerce Department’s recent report, builders ramped up construction on new homes last year as buyers eagerly sought more housing options. Single-family housing starts jumped 13.4% in 2021 compared to 2020. But builders say supply-side issues pose challenges to keeping that pace in 2022. In December, builders pointed to supply challenges as the main culprit behind a 2.3% month-to-month decrease in single-family construction. “The price and availability of building materials, and the supply chain in general, remains the most pressing immediate challenge for builders as they seek to add housing supply,” says Chuck Fowke, chairman of the National Association of Home Builders. “Policymakers must focus on easing production bottlenecks and eliminating tariffs on Canadian lumber to help address the issues builders are currently facing.” A shortage of homes for sale among the existing-home market is prompting more consumers to consider new-home construction. Builders say buyer demand has soared over the past year.

Source and link to the full article: National Association of Home Builders