The Key to Reducing Post-Refi Boom Borrower Churn

In this webinar, PRMG Chief Lending Officer Kevin Peranio will help attendees sort through the right technologies as he shares the tech investments that have had the biggest impact on his business.

Tracey Velt breaks down the latest RealTrends 500 rankings

During the episode, Velt highlights which brokerages achieved top rankings in both categories for 2020, and shares what stood out to her the most about the rankings.

Navigating Closing Struggles in 2021’s Purchase Market

Join this webinar to discover the most current information on hybrid and full eNote eClosings and discuss key criteria to successfully implementing your eClosing strategy.

About 7M refi candidates missed the “forever rate” boat

Rates jumped to 3.17% last week and Black Knight reported that there are now just 11.1 million “high quality” refi candidates. The smallest number of potential refi candidates in a year.

MortgageReal Estate

First American says consumer house-buying power is highest its been in nearly two decades

In June, consumer buying power increased by 12.2% from the previous year

In June, home prices fell 2.2%, declining 4.6% year over year, according to First American’s Real House Price Index.

According to First American’s data, unadjusted house prices sit 6.3% above the housing boom peak. Whereas consumer buying power ticked up 3.3% between May and June, increasing 12.2% year over year.

This means when consumer house-buying power is factored in, home prices are actually 41.3% below their 2006 peak and 18% below prices from January 2000.

Two of the three key drivers of the RHPI, household income and mortgage rates, swung in favor of increased affordability in June, said First American Chief Economist Mark Fleming.

“The 30-year, fixed-rate mortgage fell by 0.8 percentage points and household income increased 2.4% compared with June 2018. When household income rises, consumer house-buying power increases,” Fleming said. “Declining mortgage rates have a similar impact on affordability, so in June home buyers received a double shot of house-buying power to jolt affordability in their favor nationally.”

Fleming attributes the third driver to nominal house prices, which experienced a year-over-year increase of 7% in June.

“Increases in nominal house prices make housing less affordable. Yet, the RHPI experienced a 4.6% decline compared with one year ago,” Fleming said. “The reason? The true cost of housing reflects a consumers’ purchasing power, which is a function of mortgage rates and incomes, and in June, those measures tipped the scale in favor of affordability.”

According to Fleming, the continual “tug-of-war” between house-buying power and nominal house prices will ultimately determine the fate of real house prices.

“Currently, the unemployment rate in the U.S. is at a 50-year low, jobs are plentiful, and wages are rising. In June, average hourly earnings increased 3.3% compared with one year ago, which translates to a 2.4% increase in household income,” Fleming said. “Since June 2018, household income growth increased consumer house-buying power by $8,600.”

“The net effect of these dynamics? Consumer house-buying increased by $44,000 in June compared with one year ago, more than enough to overcome the 7% increase of nominal house price appreciation,” Fleming said. “In fact, house-buying power is the highest it’s been since we began tracking it in 1991.”

Most Popular Articles

Millions will enter housing market in 2021: Zillow

Up to 2.5 million households could enter the housing market in 2021, per Zillow. The buyers will descend on the “secondary cities” across the U.S.

Apr 07, 2021 By

Latest Articles

William Raveis ain’t no stinkin’ iBuyer

Like others, resi brokerage & lender William Raveis is happy to buy your home. But its new program doesn’t mean it’s an iBuyer.

Apr 09, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please