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.

MortgageReal Estate

The housing market is losing steam

66,000 new home sales in June, down from 68,000 sales in May

Mortgage applications for new home purchases in June decreased 3% from May and 23.8% year over year, suggesting a slowdown in the housing market, according to a recent report from the Mortgage Bankers Association.

New single-family home sales were reported at a seasonally adjusted annual rate of 704,000 units in June, a decrease of 5% from May’s pace of 741,000. The MBA estimates there were 66,000 new home sales in June, down from 68,000 such sales in May.

Overall sales of new homes are still down 7% from last year, according to Joel Kan, MBA associate vice president of economic and industry forecasting.

“Last year was the strongest year in the housing market for new home sales in over a decade,” he said. “Right now, homebuilders are encountering stronger headwinds, as severe price increases for key building materials, rising regulatory costs, and labor shortages impact their ability to raise production. This has dampened new home sales and quickened home-price growth.”

Mark Palim, deputy chief economist at Fannie Mae, said anecdotal reports of builders delaying or turning down orders to clear a growing construction backlog appears to be borne out by the recent housing starts data.

Keep Up With the Latest Third Party Origination News

Want to stay up to date with the latest on the third party origination front? We designed a specific news hub with lenders and brokers in mind, with Rocket Pro TPO leading the discussion.

Presented by: Rocket Pro TPO

“The month’s increase in single-family starts coincided with a slowdown in single-family permits, which fell 6.3 percent,” Palim said Tuesday. “While this data tends to be noisy on a month-to-month basis, the divergence between starts and permits is consistent with builders struggling to keep up with orders, as is the tick up in homes authorized but not yet started. With lumber prices recently pulling back, we expect some near-term strength in construction. However, June’s starts gain was somewhat smaller than we had anticipated while the fall in permits was greater. Therefore, a modest downward revision to our near-term forecast is likely.”

Homes for sale are still being snatched up quickly throughout the country, but a recent slowdown in bidding wars may signal some buyer fatigue in the housing market. Redfin reported recently that 65% of home offers written by company agents in June faced competition, down from a rate of 72.1% in May and a peak of 74.1% in April. New listings are also up 4% year over year, meaning more properties are hitting the housing market for buyers to bid on.

In 2018-2019, total housing market inventory was in the range between 1.52 million and 1.92 million, and that level of inventory helped to drive real home-price growth in 2019 into negative territory briefly. Existing home sales during those years stayed in the monthly sale range of 4.98 million to 5.61 million homes, according to the National Association of Realtors.

Then the COVID-19 pandemic hit, and after eight months of consecutive gains spanning 2020 and 2021, the consequences of low home inventory finally caught up with the housing market in February 2021.

Conventional mortgage loans composed 74.4% of loan applications in June, while FHA loans composed 14%. RHS/USDA loans composed 1% and VA loans composed 10.6%. The average loan size of new homes increased from $384,323 in May to $392,370 in June.

“Still-low levels of for-sale inventory are also pushing prices higher as competition for available units remains high among prospective buyers,” Kan said. “In addition to price increases, we are also seeing fewer purchase transactions in the lower price tiers as more of these potential buyers are being priced out of the market, further exerting upward pressure on loan balances.”

Leave a Reply

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

Most Popular Articles

FHFA: Government to back mortgages up to $970,800 in 2022

The FHFA today announced the baseline conforming loan limit for 2022 will be $647,200, an increase of 18%. In high-cost areas, the new ceiling loan limit will be $970,800.

Nov 30, 2021 By

Latest Articles

Zillow: Over half of our iBuying inventory is on the move

Zillow said Thursday that more than 50% of its remaining iBuying inventory “has sold, is under contract to sell or has reached agreement on disposition terms.”

Dec 02, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please