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

Sales of new houses spike in May on low rates

Volume rises to the highest level since February as states ease lockdowns

Sales of new houses jumped 16.6% in May as low mortgage rates and a shortage of inventory in the existing-home market enticed Americans released from stay-at-home orders to buy from builders.

Purchases of new single-family houses rose to 676,000 at a seasonally adjusted and annualized pace, the highest level since February, the month before the pandemic struck the U.S., according to a government report on Tuesday. The median price was $317,900, a gain of 1.7% from a year earlier.

About 27% of the homes sold in May were not yet started, 36% were under construction, and 37% were completed, according to the data that records a home as sold when it goes under contract.

Demand for new homes is rising as financing costs are being driven lower by a Federal Reserve bond-buying program aimed at helping the economy during the pandemic, said Robert Dietz, chief economist of the National Association of Home Builders. The central bank is purchasing mortgage-backed securities to boost demand in the bond markets, resulting in lower yields and cheaper home-loan rates.

“The low-interest-rate environment is causing housing to improve faster than other parts of the economy, which tells us the housing sector is likely to play a leading role in the emerging recovery,” Dietz said in an interview.

The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.13% last week, according to Freddie Mac. Rates are likely to remain low through the end of 2021, according to a June 10 Fannie Mae forecast that put the average for this year at 3.2% and the average next year at 2.9%.

Pandemic lockdowns are another factor in the sales jump, Dietz said. Some people who were cooped up together for weeks in homes that lacked features they need – like home offices – are now searching for better digs, he said.

“There’s been a renewed focus on the importance of housing, particularly during a public health crisis,” he said.

Also, some families have decided they want to live in lower-density areas, Dietz said.

“We’re seeing a geography change,” Dietz said. “Buyers are looking at lower-density markets because of concerns over the virus – they don’t want to be in central city areas where they have to be connected to the subways, for example – and that supports builders.”

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