Oct. 10, 2024
- Elizabeth Ackerman
- Oct 17, 2024
- 5 min read
Pending home sales post biggest increase since 2021
Redfin
Pending U.S. home sales rose 2 percent from the year prior during the four weeks ending October 6, the biggest increase in three years. Demand picked up at earlier stages of the homebuying process, too. Redfin’s Homebuyer Demand Index – a measure of tours and other buying services from Redfin agents – say near its highest level since May last week, and mortgage-purchase applications are up 8 percent month over month. New listings are also rising, with a 5.7 percent year-over-year uptick.
Pending sales improved because buyers came out of the woodwork in late September after the Fed’s interest rate cut, even though mortgage rates had already been declining for several weeks in anticipation of the cut.
Consumer confidence in housing market reaches highest level in two years
Mortgage Orb
Consumer confidence in the housing market increased in September, as per Fannie Mae’s Home Purchase Sentiment Index (HPSI), which rose to a score of 73.9, the highest in two years. The share of survey respondents who say it is a good time to buy a home increased 2 percentage points (19 percent) in September compared with August, while the percentage who say it is a bad time to buy decreased from 83 percent to 81 percent. Conversely, the percentage of respondents who say it is a good time to sell a home (65 percent) remained unchanged compared with August, while the percentage who say it’s a bad time to sell (35 percent) increased 1 percentage point.
The share of respondents who say they expect mortgage rates to go down in the next 12 months increased from 39 percent to 42 percent, a new survey high – while the percentage who expect mortgage rates to go up increased from 25 percent to 27 percent.
America’s inflation is getting back to normal, but price problems persist
CNN
America’s inflation continued to slow in September, reaching a fresh, three-and-a-half-year low and coming in at a pace that’s similar to what was seen in 2017 and 2018, according to data released Thursday. The Consumer Price Index, which measures price changes across commonly purchased goods and services, was 2.4 percent for the 12 months ended in September, slowing from a 2.5 percent annual rate in August, according to the latest Bureau of Labor Statistics report. This is the slowest since February 2021.
A jump in food prices – a sweeping bird flu has caused egg prices to spike – combined with ongoing, but easing, shelter-related inflation drove the overall CPI higher last month despite falling gas prices, BLS said. Stripping out food and energy costs, categories that are typically quite volatile, core CPI rose 0.3 percent in September, bringing the annual rate up to 3.3 percent after holding firm at 3.2 percent the past two months. The CPI was expected to be stubbornly high for the month, reflecting persistent housing inflation and lifts in prices for items such as insurance, lodging costs and vehicle prices.
What will happen to home prices as interest rates are cut?
CBS News
Interest rates have been trending downward, with the Federal Reserve implementing its first cut of 2024 in September. Analysts predict more cuts could follow in the final months of this year and into 2025, potentially reshaping the real estate market. But lower rates don’t always mean better deals or lower home prices. In fact, rate cuts can affect the housing market in surprising ways. Some experts predict rising prices but declines and stability are also plausible under certain circumstances.
Lower interest rates typically energize the housing market. “The most likely scenario is that home prices will rise if rates cuts happen amid economic growth and limited housing supply,” says Albert Lord, founder and CEO of Lexerd Capital Management. That’s why he and other experts suggest that buyers should act quickly to take advantage of lower rates, while sellers may want to hold off to maximize offers as demand increases. While lower rates often boost home values, however, it’s not a guaranteed outcome. A significant economic downturn could lead to price drops, even with rate cuts. This less common scenario can happen when broader economic factors override the benefits of cheap borrowing. In certain cases, home prices could stay put, even when interest rates drop. High-demand areas such as Santa Barbara and other coastal cities are always popular and the limited inventory can prevent significant price fluctuations in those areas. However, buying even when rates are higher could allow home shoppers to purchase a home with less competition, and then they can refinance if rates drop later.
Do you have to tell a homebuyer if your house is haunted? What CA law says
Sacramento Bee
Buying and selling a home in California requires complete transparency. However, as Halloween approaches, a spooky question haunts the real estate market: When selling a house, are California home sellers and agents required to disclose if a property is haunted? California law has no direct mention of paranormal activity when it comes to selling a house, Zillow said in a news release in October 2023. However, the law requires California residents to disclose any death that’s occurred in the home in the past three years. In addition, it’s best practice for a seller to disclose anything they know about the home, so especially if a potential buyer asks, it’s incumbent upon the seller and agent to be open about that they know.
If a buyer asks a seller or listing agent about the history of the home, the listing agent is required to answer honestly about any deaths that have happened on the property. It does not matter how long ago the death occurred. There is one exception to the law. If a person died due to HIV or AIDS, then the information doesn’t need to be disclosed to the buyer, due to a law passed in 1986 that protects the seller from disclosing details of the death when a buyer brings the topic into question. That law was intended to protect against stigmatization and discrimination, the Los Angeles Times reported in 1990.
Weekly mortgage demand drops as interest rates hit the highest level since August
CNBC
An abrupt turn higher for mortgage interest rates caused weekly demand from both potential homebuyers and current homeowners to drop. Total mortgage application volume fell 5.1 percent for the week compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,650 or less increased to 6.36 percent from 6.14 percent, with points increasing to 0.62 from 0.61 (including the origination fee) for loans with a 20 percent down payment. The refinance share of applications, which had been surging for several months, fell 9 percent for the week but were still 159 percent higher than the same week one year ago. Applications for a mortgage to purchase a home were essentially flat for the week, dropping 0.1 percent from the previous week and were 8 percent higher than the same week one year ago. Inventory has improved, but there is still not enough for sale on the more affordable end of the market.
