Mortgage rates held steady this week as the world awaits more information about the severity of the omicron variant of COVID-19 and ongoing supply chain issues. The 30-year fixed-rate mortgage averaged 3.11%, Freddie Mac reports.
“Mortgage rates continue to remain stable notwithstanding volatility in the financial markets,” says Sam Khater, Freddie Mac’s chief economist. “The consistency of rates in the face of changes in the economy is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty. This low mortgage rate environment offers favorable conditions for refinancing.”
Contract signings climbed 7.5% in October, and home sales for 2021 are on pace to hit a 15-year high, the National Association of REALTORS® reported Monday. Pending home sales rebounded after a decline in September.
Despite rising mortgage rates, home buyers appear undeterred by higher financing costs and home prices. Contract activity increased month over month in all four major regions of the U.S. NAR’s Pending Home Sales Index is a forward-looking indicator of home sales based on contract signings.
“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” says Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.”
Home design is getting more personal. More homeowners are using their homes to show their individuality and design freedom, according to home design experts at The Plan Collection, an online home design firm.
“It makes sense as people have gone from having to be home to wanting to be at home in an environment that expresses their personalities and individual tastes,” says Laurel Vernazza, home design expert at The Plan Collection. “Since no one could travel, homeowners had to bring those experiences into their homes.”
The Plan Collection’s team offers its predictions of the hot home design and building trends for 2022, including:
Home buyers are still snatching up homes at a quick pace. Homes sold more quickly in October than in any October in recent history, according to realtor.com®’s Monthly Housing Report.
The typical home spent just 45 days on the market in October, reaching an eight-month streak of homes selling faster than in any month before 2021, realtor.com® says.
“The year may be winding down, but 2021’s feverish pace of home sales continues to hit new records,” says Danielle Hale, realtor.com®’s chief economist. “Despite returns to more typical pre-COVID seasonality which means a slower fall versus summer season, October housing data suggests that demand is still unseasonably high.”
A first-time home buyer may need to be educated about the realities of the housing market before they fall in love with a home and then quickly lose out to another bid. To prevent heartache, real estate professionals can have frank conversations with their buyers about the realities of the competition and the amount of money it takes to become a home buyer in today’s heated market.
No home will be perfect.
Housing inventories are ultra-low. Any home viewed as “perfect” will have many buyers lined up, thus likely instigating a bidding war. Buyers may need to be willing to accept some cosmetic changes or a home farther from their preferred destination, realtor.com® says.
Buyers also can’t expect sellers to fix everything after a home inspection. In a seller’s market, many sellers have backup offers, including those buyers who may be willing to waive a home inspection. “Expecting a seller in a competitive market to address every line item [from an inspection report] is a delusion that could cost you the house,” realtor.com® says.
As COVID-19 numbers fall, more offices are setting timelines to bring their employees back to the office. But they’re realizing it may take a lot of convincing to get workers to leave their comfy home offices to come back into the office. They’re increasingly taking on remodels to attract employees back, adding amenities such as outdoor terraces, private gyms, green spaces, lounge areas, and flexible conference centers.
“There is no more room for generic work environments,” Laurent Lisimachio, principal and design director at Gensler, told the New York Post. “You are competing with someone’s living room so commercial real estate has to be the site of incredible experiences.”
Companies are taking on several renovations, like efforts to improve buildings’ air quality to make their employees feel safer and offering additional space so workers won’t feel cramped.
Construction waste is filling landfills. The construction and demolition industry has about double the amount of trash as all the other waste in cities, Fast Company reports. Companies are searching for nontraditional sources to eliminate some of that landfill waste and keep costs down.
Biohm, a biomanufacturing startup firm based in the United Kingdom, plans to start mass production of insulation made from mushrooms—actually their mycelium component, the thread-like roots that connect mushrooms. The company says biodegradable insulation outperforms the more common foam. It’s also slower to burn in a fire.
“Mycelium is usually found in forests, underground, and it holds the topsoil together,” Ehab Sayed, founder and director of innovation at Biohm, told the World Economic Forum in March. “It allows plants to connect to one another—it’s like nature’s internet. And we grow that into an insulation panel that can provide superior insulation values compared to other alternatives on the market.”
Upcoming Dates When Home Buyers Pay Lowest Premiums
October 8, 2021
Home buyers may find more opportunities with a greater number of listings for sale and may be able to snag better housing deals this month. A new analysis from ATTOM Data Solutions shows that October is the best month of the year to buy a home.
Buyers who close in October tend to get better deals compared with those who purchase during the spring buying season. Homes tend to fetch lower premiums than other months of the year. For example, buyers may see a 2.9% premium on listings compared to 11.5% in May, according to the study, which reflects more than 33 million single-family home and condo sales over the last eight years.
The cooler months—November and December—also offer the best times of year to buy a home, researchers found.
Best Days to Buy
Researchers also pinpointed dates when home buyers historically tend to snag the lowest premiums on real estate. Those dates are:
- Dec. 5: averages a 1.6% premium
- Dec. 26: 2% premium
- Jan. 6: 2.2% premium
- Nov. 9: 2.3% premium
- Dec. 31: 2.4% premium
On the other hand, the highest premiums on home purchases are found on May 23 and May 27, both at 17.4%; May 20 at 16.6%; May 16 at 15.6%; and May 19 at 15.4%.Source: “October Is Ripe for Homebuyers According to an Analysis From ATTOM on Historical Home Sales,” ATTOM Data Solutions (Oct. 7, 2021)
The housing market has been fiercely competitive over the last few months, but hopeful buyers who keep getting shut out may soon find better luck. Several signs in the housing market point to a potential opening to buy this fall, housing analysts say.
For one, competition is reportedly cooling and listings are receiving fewer offers. In September, the real estate brokerage Redfin reported that bidding wars reached their lowest level this year.
Also, more listings are coming to market, offering buyers more choices. A recent realtor.com® report shows housing inventory is at a high for 2021. Nearly one-third of the 50 largest metros saw increases in the number of newly listed homes compared to last year.
“This September, buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020,” says Danielle Hale, realtor.com®’s chief economist. “Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.”
Millennials have been a closely watched group in real estate for years, and forecasters have long made predictions about their entrance into homeownership. The beliefs about this massive segment of potential buyers have been significant—they favor renting over buying, they just want to live in the city, and they must have their parents’ help to buy.
Jessica Lautz, vice president of demographics and behavioral insights at the National Association of REALTORS®, recently blogged about the most common myths about millennials at the association’s blog. Here are some myths she busted:
Myth 1: Millennials aren’t interested in homeownership.