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May 16, 2024


Buying a home in Southern California? There are now more options

Los Angeles Times

For much of the past year, the Southern California housing market has seen an extreme shortage of homes for sale, due largely to a long-term lack of building compounded by homeowners choosing not to sell and give up low mortgage rates. However, in April, the number of homes listed for sale in most SoCal counties rose from the same month a year earlier, according to data from Zillow. Los Angeles, Riverside, San Bernardino and Ventura counties turned positive for the first time since the first half of 2023, each recording an increase of at least 5 percent.

Orange County was the only one to see a decline, while in San Diego, inventory has risen for two consecutive months and is 18 percent higher than it was one year ago. In general, the availability of homes remains at historically low levels, but as it rises, it opens the possibility that prospective buyers will have an easier time finding a home.




Percentage of mortgages going to non-white people increases

Redfin

The share of U.S. mortgages taken out by Hispanic, Black and Asian homebuyers has increased over the last five years, while the share taken out by white homebuyers has declined, according to Redfin’s recent analysis of 2018-2023 Home Mortgage Disclosure Act (HMDA) data covering mortgage originations for primary homes. The share of new mortgages taken out by Hispanic buyers increased to 14 percent in 2023 from 12.6 percent in 2022 and 11 percent in 2018. Black buyers represented 8.7 percent of new mortgage holders last year, up from 8.6 percent in 2022 and 7.1 percent in 2018. These figures lag demographic trends, as 18.8 percent of the U.S. population is Hispanic, and 12.2 percent of the population is Black. Asian buyers took out 8.2 percent of new mortgages in 2023, unchanged from 2022 but higher than the 6.4 percent rate in 2018. All in all, people who are Hispanic, Black, Asian or two or more races took out 37.8 percent of mortgages last year, up from 36 percent in 2022 and 29.6 percent in 2018.


Just under two-thirds (62.2 percent) of new mortgages issued in 2023 went to white homebuyers, compared to 64 percent in 2022 and 70.4 percent in 2018. As of 2022, the most recent year for which census data is available, 59.9 percent of the U.S. population is white. “The pool of homebuyers taking out mortgages is becoming less white because America is becoming more diverse, and many people of color are in their prime homebuying years,” said Redfin Senior Economist Elijah de la Campa.




Builders slashing home prices as their confidence declines

MarketWatch

Homebuilder confidence cut home prices in May over expectations that new home sales will fall over the coming months, as the National Association of Home Builders’ (NAHB) monthly confidence index declined by 6 points to 45. A year ago, the index stood at 50.


About 25 percent of builders cut prices in May, the NAHB said, up from 22 percent in April. The average price cut was 6 percent. More builders were using sales incentives rather than price cuts to improve sales in May, up to 59 percent from 57 percent the month before. Builders may benefit in the coming weeks if slowing inflation causes mortgage rates to fall.




A 20% down payment isn’t needed. Here’s how much people are paying.

CNBC

Consumers are putting down less money to buy a home than you might expect. The average down payment was 13.6 percent in the first quarter of 2024, according to a new report by Realtor.com. The median down payment was about $26,000 across the nation. Both figures are up year over year, but down from peaks in the third quarter of 2023, when buyers put down an average of 14.7 percent or a median of $30,400. “Not only is it possible to buy a home with less than 20 percent down, but this data show that a majority of buyers are in fact doing so,” said Danielle Hale, chief economist at Realtor.com


People often think of a 20 percent down payment as the gold standard when buying a home, but it’s not always necessary, according to experts. That significant down payment helps one avoid mortgage insurance and can lessen monthly payments, “but it’s by no means the law of the land,” says Mark Hamrick, senior economic analyst at Bankrate.com.




Inflation eases as core prices see smallest increase since 2021

Yahoo! Finance

U.S. consumer price increases cooled during the month of April, according to the latest data from the Bureau of Labor Statistics. The Consumer Price Index (CPI) rose 0.3 percent over the previous month and 3.4 percent over the prior year in April, a slight deceleration from March’s 3.5 percent annual gain in prices and 0.4 percent month-over-month increase. Investors now anticipate two 25 basis point interest rate cuts this year, down from the six cuts expected at the start of the year.


Housing was one area in which inflation did not ease. The index for rent and owners’ equivalent rent (OER) each rose 0.4 percent, matching March’s rise. Owners’ equivalent rent is the hypothetical rent a homeowner would pay for the same property. Gas and food also continued to rise, while other costs slowed.




Mortgage demand from homebuyers drops even as interest rates lower

CNBC

Mortgage rates last week dropped to the lowest level since April, but buyers are still struggling to afford today’s housing market. As a result, mortgage demand flattened. Total mortgage application volume inched up just 0.5 percent from one week earlier, according to the Mortgage Bankers Association’s seasonally adjust index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less on average) decreased to 7.08 percent from 7.18 percent, with points decreasing to 0.63 from 0.65 for loans with a 20 percent down payment. Applications to refinance a home loan, which are most sensitive to weekly rate changes, increased 5 percent for the week and were 7 percent lower than the same week one year ago. Applications for a mortgage to purchase a home fell 2 percent for the week and were 14 percent lower than a year ago. The drop was driven by a 9 percent decline in FHA applications, which are favored by first-time or lower income buyers because they allow much smaller down payments than conventional loans.


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