New Home Sales Rise for Second Consecutive Month

14949 SW Hat Rock Loop, Powell Butte, OR 97753
Presented by Carmen Cook | Offered at $1,850,000 | MLS# 220129823

From housingwire.com

Market supply reaches at a 6.1 month level.

Sales of new single-family homes in August increased 1.5% from the prior month, at a seasonally adjusted annual rate of 740,000, according to a report from the U.S. Commerce Department released on Friday. That’s the second straight month of rising sales for homebuilders, though there’s good reason to think the height of the frenzy is behind us.

Sales of new homes were down 24.3% from a year prior, and the median sales price of new single-family homes in August 2021 reached $390,900, 20.1% higher than August 2020.

“The housing market over the summer of 2021 appears to have settled at a level lower than the surge in the second half of 2020 into early 2021,” Ben Ayers, a senior economist at Nationwide, said in a statement. “Still, new home sales remain high relative to levels since the housing market crash and show continued strong demand from buyers.”

The number of new houses for sale in August 2021 (378,000) represents a 6.1 month supply of new houses at the current sales rate, according to the report. This is a 74.3% increase over August 2020 levels, and reflects the 17.4% increase in housing starts compared to a year ago.

Industry experts feel that this is a reflection of the steadying confidence among homebuilders, which remains high, despite a recent decline.

“Builder sentiment remains strong and housing demand is being supported by ongoing low mortgage interest rates and a shortage of existing home inventory,” Chuck Fowke, chairman of the National Association of Home Builders, said in a statement

Despite rising housing starts and steadying confidence levels among builders, the industry still faces some challenges including continued material and labor shortages. Because of the labor and material issues, many homebuilders have delayed putting up the number of new homes up for sale.

“The solid improvement in August sales does not mean that builders are in the clear — building material supply chain issues and labor shortages are still very real challenges that buyers and builders alike are eager to see resolved,” Zillow economist Matthew Speakman said in a statement. “It’s critical that builders continue to find ways to get around these existing challenges and bring new homes to the market in higher numbers, giving even marginal relief to would-be buyers exasperated by intense competition and limited housing supply.”

Nearly 80% of homes sold in August were either under construction or yet to be built.

“This report continues to highlight the ongoing difficulties that homebuilders are facing as they attempt to work through their current construction backlog, due to a shortage of labor and elevated material costs and outright shortages,” added Mark Palim, deputy chief economist at Fannie Mae.

Regionally, on a year-to-date basis, new home sales fell 1.0% in the Northeast and 2.3% in the West, but rose 4.4% in the Midwest and 4.5% in the South.

Full article at housingwire.com


Mortgage Demand From Homebuyers Jumps to Highest Level Since April, After New Listings Rise All Summer

2185 Christina St NW, Salem, OR 97304
Presented by Hamid Karimi | Offered at $1,500,000 | MLS# 21147454

From cnbc.com

Fall is usually the start of the slower season for the housing market, but nothing is usual in today’s pandemic-driven housing market. Potential homebuyers are seeing a slight rise in inventory and consequently rushing back into the fray.

Mortgage applications to purchase a home jumped 7% last week from the previous week, seasonally adjusted, according to the Mortgage Bankers Association. An additional adjustment was made to account for the Labor Day holiday. That is the highest level since April of this year. These applications were still 11% lower than the same week one year ago, but that was the smallest annual decline in 14 weeks.

Buyers have been hamstrung by the meager supply of homes for sale, but that supply has been rising lately, albeit slowly. The number of new listings rose for nine straight weeks during the summer, but finally fell again last week, according to a Realtor.com report.

“Even with the recent new listings slip, the gap with pre-COVID levels has shrunk significantly as more new sellers have entered the market so far in 2021 than last year,” according to the report.

Home prices continue to gain at a record pace, and that was also reflected in the purchase mortgage applications.

“Both conventional and government purchase applications increased, and the average loan size for a purchase application rose to $396,800. The very competitive purchase market continues to put upward pressure on sales prices,” said Joel Kan, an MBA economist.

Applications to refinance a home loan fell 3% for the week and were also 3% lower than the same week one year ago. Borrowers have not had a lot of incentive to refinance, as mortgage rates have barely budged in the last month, and rates are now higher than they were at the start of the year.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03%, with points decreasing to 0.32 from 0.33 (including the origination fee) for loans with a 20% down payment.

The refinance share of mortgage activity decreased to 64.9% of total applications from 66.8% the previous week.

Full article at cnbc.com


Mortgage Rates Stuck at 2.88% Amid Rise in COVID Cases

15007 Ponderosa Loop, La Pine, OR 97739
Presented by Kelly and Corey Charon | Offered at $1,900,000 | MLS# 220122149

From housingwire.com

The average 30-year fixed-rate mortgage was stagnant at 2.88% for the week ending Sept. 9, according to mortgage rates data released Thursday by Freddie Mac‘s PMMS.

The week prior, mortgage rates also held steady at 2.87%. This week’s near constant mortgage rates tracked with the 10-year Treasury yield, which rose slightly and then tapered off in the past week. The 10-year Treasury yield for Sept. 8 was 1.35.

According to Sam Khater, chief economist at Freddie Mac, the recent rise in COVID cases has hindered progress in the economy overall.

“While the economy continues to grow, it has lost momentum over the last two months due to the current wave of new COVID cases that has led to weaker employment, lower spending and declining consumer confidence,” said Khater. “Consequently, mortgage rates dropped early this summer and have stayed steady despite increases in inflation caused by supply and demand imbalances.”

“The net result for housing is that these low and stable rates allow consumers more time to find the homes they are looking to purchase,” Khater said.

A year ago at this time, the 30-year fixed-rate mortgage averaged 2.86%. The 15-year fixed-rate mortgage rose only slightly from the week prior, again, at 2.19%.

Full article at housingwire.com


New Listings Jump 5.1%; Price Adjustments Moderate

12716 S Edgecliff Rd, Portland, OR 97219
Presented by Kristen Kohnstamm | Offered at $2,395,000 | MLS# 21006067

From REALTOR® Magazine

More homeowners are listing their homes for sale, which is opening up options for anxious home buyers who have faced fierce competition the last few months over a limited housing stock.

New listings rose 5.1% in the 50 largest metros. The largest increases were in Columbus, Ohio (up 25.6%); Louisville, Ky. (up 22.8%); and Cleveland (up 21.6%), according to realtor.com®s newly released Monthly Housing Report.

Also, as more inventory and new listings arrived on the market in August, the rate of sellers making price adjustments has also begun to approach more normal levels, realtor.com® notes. The share of sellers who made listing price adjustments grew to 17.3% of active inventory, which is the highest share in 21 months and close to more typical levels that were seen between 2016 to 2019, researchers note.

Still, housing remains tight, even if with the additional inventory. U.S. housing inventory was down 25.8% year-over-year in August. That did mark an improvement over last month when inventories were down 33.5% annually.

Meanwhile, new listings were up 4.3% compared to a year ago.

“Low mortgage rates have motivated home buyers to endure this year’s challenging market and now some buyers are starting to see their persistence pay off,” says Danielle Hale, realtor.com®’s chief economist. “This month, new sellers added more affordable entry-level homes to the market compared to last year, while others began adjusting listing prices to better compete with an uptick in inventory.”

Housing remains a strong seller’s market as homes continue to sell quickly at record-high prices, Hale says. “But now a home priced well and in good condition may see two to three bids compared to 10 last year,” she notes. “For sellers not seeing as many offers, it may be worth revisiting pricing strategies as buyers continue searching for homes that fit their budgets.”

Full article on REALTOR® Magazine