Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Real Estate

Buyers are overpaying, but are there signs of a bubble?

February's numbers show the strongest purchase market since 2006

Home prices have skyrocketed in the past year, and data from Redfin backs up what buyers, sellers, and agents have known for months.

The national average of home prices rose 14.4% year-over-year to $336,200 in February – the largest increase since July 2013, according to the latest report from Redfin. Closed home sales were up 5% from a year earlier and pending sales rose 21%. In all, the seasonally-adjusted number of homes sold totaled 627,400 in February.

That’s with unprecedented winter storms hitting most of the South in February, too.

As proof of the impact of the country’s low inventory and high cost of building materials, new listings fell 16% – the second-largest decline on record since Redfin’s data began in 2012, only passed by the drop in April 2020.

Mortgage rates have also jumped to north of 3%; at its current pace, the Mortgage Bankers Association is forecasting rates will reach nearly 3.5% by the end of 2021. New home applications are down as well, as builders are still struggling with smaller-than-normal crews and expensive materials that are hard to procure. And even with March well underway, mortgage applications are still in decline.


Non-QM: New Market + New Rules = New Opportunities

With the new rules of Non-QM 2.0 now in play and an oncoming wave of potential new customers, do you have the tools in place to help you keep up, streamline efficiencies and grow your potential market share? Join leading industry experts for a 45-minute discussion on the market, challenges and opportunities.

Presented by: LoanScorecard

The shortage of homes for sale is making homebuyer competition intense, according to Redfin Chief Economist Daryl Fairweather. Approximately 36% of homes sold last month went above asking price, she said – the largest share on record.

“This is the strongest seller’s market since at least 2006,” Fairweather said. “Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to. It seems like the only move-up buyers who are confident enough to list their homes are those who are relocating to a more affordable area where they’ll have an edge on the local competition.”

Fairweather insisted the housing market isn’t in a bubble, however, and expects demand to settle down as mortgage rates rise. But the continued vaccine rollout and stimulus money from President Joseph Biden’s American Rescue Plan could keep buyer demand high for a while longer.

“Yes, some buyers are overpaying for homes, particularly those who are moving to affordable destinations and paying well over asking prices to win homes in bidding wars, but these buyers are often covering any shortfall in the bank’s appraisal amount and locking in low monthly mortgage payments that they can easily afford,” Fairweather said.

Median sale prices also increased from a year earlier in all but one of the 85 largest metro areas Redfin tracks. The only place prices didn’t increase was San Francisco, where they were flat from a year ago. The largest price increases were in Bridgeport, CT (+31%), New Haven, CT (+31%) and Camden, NJ (+24%).

Austin (-15%), McAllen, Texas (-13%) and Salt Lake City (-13%) saw the largest decline in home sales, but those drops were likely due to escrow delays from the intense February winter storms.

Comments

  1. In the Portland Metro area, homes are getting bid up 10% to 20%. You say it is fine that the buyer can make up the difference in cash now, but what happens when these owners try to sell years down the road and may have to bring more cash to the table? Real estate should increase in value, but there will come a point where the affordability index could be in crisis.

Load More Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

Better.com lays off LOs, secures $750M cash injection

Digital mortgage lender Better.com is laying off 9% of its workforce ahead of a $750 million cash injection from financial backer SoftBank Group.

Dec 01, 2021 By

Latest Articles

What Omicron, bond market and jobs mean for housing

We often have two to three job reports per year that miss estimates badly. However, remember that we have over 10 million job openings.

Dec 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please