Homeowners Are Preparing to List After the Pandemic

May 7, 2020

Real estate professionals report that about 77% of potential sellers are preparing to sell their homes once stay-at-home orders from the COVID-19 pandemic are lifted, according to a newly released survey from the National Association of REALTORS®. More than half of REALTORS® report their clients are taking on do-it-yourself home improvement projects in preparation, too.

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” says Lawrence Yun, NAR’s chief economist. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

NAR conducted an Economic Pulse Flash Survey May 3-4 and asked about 2,500 members how the coronavirus has been affecting their real estate business.

Home buyers are gradually re-emerging, but the pandemic has shifted some of their housing preferences, according to the results. Five percent of REALTORS® report that their clients have changed their neighborhood preferences from urban to suburban due to the pandemic. Also, one in eight REALTORS® surveyed say that buyers have changed at least one home feature that’s important to them since the COVID-19 pandemic. The most common features identified are home offices, yard space for exercising or growing food, and more space to accommodate their family.

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But home buyers in search of a big bargain may not find one. Nearly 75% of REALTORS® report that their sellers have not reduced listing prices to attract buyers. Housing inventories are near record lows and that reduced competition may be prompting more sellers to stand firm on their home prices.

View NAR’s weekly housing market monitor.Source: National Association of REALTORS®

Top New-Home Features in 2020

April 7, 2020

Closets, energy efficiency, and laundry rooms appear to be home builders’ top priorities in the single-family homes they’re constructing this year.

The National Association of Home Builders conducts a nationwide survey each year to find out what home features builders are most likely to include in a typical new home. The walk-in closet in the master bedroom was the most popular home feature builders cited, according to the survey. Energy-efficient features were popular, too, such as efficient lighting, programmable thermostat, Energy Star–rated appliances, and windows. Kitchens were most likely to have a central island, a walk-in pantry, and granite countertops, the NAHB survey shows.

On the other hand, the least likely features builders were to include in the price of the home were cork flooring for the living areas on the main floor, geothermal heat pumps, solar power systems, and dual toilets in the master bath. Also, specialty rooms unlikely to be included were sun rooms, media rooms, and two-story family rooms or foyers.Source: “Most Likely (Unlikely) Features in New Single-Family Homes in 2020,” National Association of Home Builders’ Eye on Housing blog (March 25, 2020)

Record low mortgage rates last week may have offered up plenty of incentive for home buyers, even in a pandemic. Mortgage applications for home purchases increased 7% this week, which follows a 12% uptick last week, the Mortgage Bankers Association reports. Mortgage applications are viewed as a gauge for upcoming home sales.This marks the third week in a row that purchase volume in mortgage applications has increased. The strongest growth in purchase applications was reported in Arizona, Texas, and California, the MBA reports.
Continue…https://magazine.realtor/daily-news/2020/05/07/another-strong-week-for-mortgage-applications

Mortgage rates reached a new record low this week, with the 30-year fixed-rate mortgage falling to its lowest average ever since Freddie Mac began tracking such data in 1971. “The size and depth of the secondary mortgage market is helping to keep rates at record lows,” says Sam Khater, Freddie Mac’s chief economist. “These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember not all people are able to take advantage of them given the current pandemic.”
Continue…https://magazine.realtor/daily-news/2020/05/01/mortgage-rates-dip-to-new-record-low

Mortgage Rates Dip to New Record Low

May 1, 2020

Mortgage rates reached a new record low this week, with the 30-year fixed-rate mortgage falling to its lowest average ever since Freddie Mac began tracking such data in 1971. “The size and depth of the secondary mortgage market is helping to keep rates at record lows,” says Sam Khater, Freddie Mac’s chief economist. “These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember not all people are able to take advantage of them given the current pandemic.”

Freddie Mac reported the following national averages with mortgage rates for the week ending April 30:

• 30-year fixed-rate mortgages: averaged 3.23%, with an average 0.7 point, falling from last week’s 3.33% average. The previous all-time low for the 30-year mortgage was 3.29%, set during the week ending March 5. A year ago, 30-year rates averaged 4.14%.
• 15-year fixed-rate mortgage: averaged 2.77%, with an average 0.6 point, falling from a 2.86% average. A year ago, 15-year rates averaged 3.60%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.14%, with an average 0.4 point, dropping from a 3.28% average. A year ago, 5-year ARMs averaged 3.68%.

Freddie Mac reports average commitment rates, along with average fees and points, to reflect the total upfront cost of obtaining a mortgage.Source: Freddie MacComment

Most REALTORS® Confident That Home Prices Will Stand Firm

April 29, 2020

Many real estate professionals don’t foresee a significant drop in home prices from the COVID-19 pandemic, and certainly not to the degree of the Great Recession’s impact on the housing market. For residential property prices over the next 12 months, 38% of more than 4,000 REALTORS® say they expect prices to increase and 23% expect prices to remain stable, according to the March 2020 REALTORS® Confidence Index Survey, a monthly survey of real estate transactions conducted by the National Association of REALTORS®. 

“Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” Lawrence Yun, NAR’s chief economist, said in a statement following a report on pending home sales in March. “In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.”

Home prices were still rising across the country as the pandemic widened in scope in the U.S. in March. As of March, the median home sales price increased 8% year over year to $282,500, according to NAR.

The following chart compares February to March 2020 REALTOR® member projections on home prices.

“Prices have held up due to a combination of measures under the $2.2 trillion CARES Act passed plus the additional $484 billion funding passed April 23 to pay for unemployment insurance benefit claims and payroll assistance for small businesses,” Scholastica Cororaton, a research economist for NAR, notes on the association’s Economists’ Outlook blog.

The median list prices in several markets are still up compared to a year ago, according to realtor.com® data. For example, in Los Angeles, the median list price is up 16% compared to a year ago, while in Las Vegas and Denver, median listing prices are up by 3.6% and 3.5%, respectively, compared to a year ago. In the New York-New Jersey area, which has accounted for the largest share of coronavirus cases in the country, median listing prices are still up from one year ago by 2.9%.

As of April 18, 58 of the 100 largest metros were still seeing higher median listing prices when compared to a year prior, according to realtor.com® data. Properties were staying on the market longer—six more days during the week of April 18 compared to April 2019.

But markets like Washington, D.C., were seeing median list prices up by 4.4% the week of April 18 compared to a year prior.

To view the interactive charts showing the trajectory of median list prices among the 100 metro areas as of April 18, visit NAR’s Economists’ Outlook blog.Source: “Most REALTORS® Don’t Expect Steep Price Declines in Next 12 Months,” National Association of REALTORS® Economists’ Outlook blog (April 27, 2020)

The 30-year fixed-rate mortgage averaged 3.33% this week, near its all-time low, Freddie Mac reports.
“Mortgage rates have stabilized over the last few weeks as the market searches for direction in the fog of economic data,” says Sam Khater, Freddie Mac’s chief economist. “While financial markets initially rallied on the news of Federal Reserve support and are improving due to the Senate’s passage of a new small business stimulus, we continue to see a deep economic contraction amidst uncertainty about the recovery formation.”
Continue…https://magazine.realtor/daily-news/2020/04/24/mortgage-rates-settle-near-historical-lows

Like people, pets have certain needs when it comes to the space where they live, and the National Association of REALTORS®’ latest Pet Survey proves they can be the deciding factor for buyers when choosing one home over another. In fact, REALTORS® are likely to be prepared to guide clients in the right direction—the study found that 81% of members surveyed consider themselves animal lovers.
When it comes to the house your pet-conscious clients are looking for, the most frequent requests are hardwood floors and a fenced backyard. According to NAR research, 43% of households would be willing to move to better accommodate their pet, and are prepared to get rid of carpet or install a gate if necessary.
Continue…https://magazine.realtor/daily-news/2020/04/23/pet-needs-are-top-of-mind-for-buyers

Could 2.9% Mortgage Rates Be Coming?

April 22, 2020

Mortgage rates could be on a roller coaster ride over the next year, with the coming months looking to be particularly significant. In Fannie Mae’s Housing Forecast report, economists predict that the average 30-year fixed-rate mortgage for 2020 will drop to 3%, and then fall to 2.9% by 2021. Both would be all-time lows.

Many home owners with strong credit seeking to buy could see rates in the mid- or even low 2% levels, the mortgage industry predicts. “This would make buying or refinancing possible for many who can’t afford it right now,” according to The Mortgage Reports. A 2.9% mortgage rate instead of a 3.9% rate could raise homebuying power by $36,000.

The lowest average mortgage rate on record currently is 3.29%, which was set in March of this year amid COVID-19 fears, according to Freddie Mac. Mortgage rates have remained near historical lows ever since.

A year ago, mortgage rates averaged 4%. Homeowners and potential buyers can save thousands of dollars over the life of the loan from the drop in rates. For example, The Mortgage Reports uses an example of a $200,000 loan amount with a 4% versus 2.9% 30-year fixed-rate mortgage. Home buyers could potentially save $121 a month and $44,000 over the life of the loan.

“With a full year of record low mortgage rates, many homeowners would be able to refinance, reducing their monthly payments and overall loan interest,” according to The Mortgage Reports. “And prospective home buyers might be able to afford a house sooner than they thought—or buy a more expensive home than they’d be able to afford if rates were higher.”

The lower borrowing costs could help with housing affordability. Even with a slowdown likely in the housing market due to COVID-19, Fannie Mae economists are still predicting existing home prices to increase by 2.5% between 2019 and 2021.Source: Fannie Mae and “This Agency Predicts 2.9% Mortgage Rates by 2021,” The Mortgage Reports (April 21, 2020)

Real estate sales are continuing on within a global pandemic as the use of virtual tools is giving buyers a feel for homes—so much so that some are willing to put an offer on a home without even physically stepping inside.

A quarter of REALTORS® surveyed reported that their clients put contracts on homes this week without physically seeing the property. The survey was released Thursday by the National Association of REALTORS®.

Continue…https://magazine.realtor/daily-news/2020/04/16/sight-unseen-offers-are-growing