KEY POINTS

• Buyer sentiment in the housing market remained high in December, according to a monthly survey from Fannie Mae.

• The average rate on the 30-year fixed mortgage fell to the lowest level since October this week, at 3.69%, Mortgage News Daily reported.

• Prices nationally rose 3.7% annually in November, a new report from CoreLogic said. That is the largest annual gain since last February.

The average rate on the 30-year fixed mortgage fell to the lowest level since October this week, at 3.69%, according to Mortgage News Daily. That has an already competitive housing market heating up even more.

Open houses, which are usually pretty rare the first week in January, were plentiful in markets across the nation this year, as buyers hope to get in before the competition gets even worse.

Buyer sentiment in the housing market remained high in December, according to a monthly survey from Fannie Mae — the Home Purchase Sentiment Index.  In general, Americans said they did not expect mortgage rates to go up, and they expressed increasing confidence in both their household incomes as well as their employment.

The average rate on the 30-year fixed mortgage fell to the lowest level since October this week, at 3.69%, according to Mortgage News Daily. That has an already competitive housing market heating up even more.

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Open houses, which are usually pretty rare the first week in January, were plentiful in markets across the nation this year, as buyers hope to get in before the competition gets even worse.

Buyer sentiment in the housing market remained high in December, according to a monthly survey from Fannie Mae — the Home Purchase Sentiment Index. In general, Americans said they did not expect mortgage rates to go up, and they expressed increasing confidence in both their household incomes as well as their employment.

“The continued strength in the HPSI attests to the intention among consumers to purchase homes. This is consistent with the Fannie Mae forecast for 2020,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

 

“The HPSI hit and remained near an all-time high in 2019, driven by the 16-percentage point year-over-year increase in the share of consumers believing it is a good time to buy.”

Home prices are also reflecting the increasing demand for housing. Prices nationally rose 3.7% annually in November, a new report from CoreLogic said. That is the largest annual gain since last February.

“The latest U.S. index shows that the slowdown in home prices we saw in early 2019 ended by late summer,” said Frank Nothaft, chief economist at CoreLogic. “The decline in mortgage rates, down more than one percentage point for fixed-rate loans from November 2018, has supported a rise in sales activity and home prices.”

Lower mortgage rates and higher competition were top of mind among home shoppers at one of the first Sunday open houses of the year in the Atlanta area. The fully renovated three-bedroom, two-bathroom home in Smyrna was listed at $335,000, and saw plenty of interest from both occupant buyers as well as rental investors.

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“With the market value the way it is right now, there’s a lot of people jumping on the same kind of real estate that I’m looking to invest in,” said Michael Tarpley, who owns his own home nearby but is looking for an income property.

Ivette and Arturo Barajas are also looking for an investment home and have been at it for about six months. They have been watching mortgage rates very closely.

“Right now they’re a bit lower than they usually are, so it’s definitely a time to take advantage of that,” said Ivette. “Any time you can keep those rates lower, that’s the time to go for it.”

Cynthia Eunice is looking to buy a home for herself. She said she’s seen a lot of newly built homes in the Atlanta area, but they tend to be pricier, and she wants an older home with character. Unfortunately, it’s been hard to find.

“When I saw the open house, I just jumped at it,” Eunice said of the small Smyrna home. “There is a lot of competition in my price range. You have to jump on it. Things are going really quick.”

The real estate agent for the home, Melissa Fuentes, said 34 people went through the home in the two-hour open house Sunday, and she is doing two second showings on Tuesday. She expects an offer this week.

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-Source:CNBC

Redfins economic team predicts the housing market will be more competitive in 2020 as the cooldown that began in the second half of 2018 comes to an end. Charleston and Charlotte will lead the nation in home-price gains, thanks to homebuyers moving in from expensive cities. Hispanic Americans will experience the biggest gains in home equity wealth. Climate change will become a much bigger factor for homebuyers and sellers. Read on for Redfin’s six housing market predictions for 2020.

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Prediction #1: Bidding wars will rebound thanks to low mortgage rates and a lack of homes for sale

Low mortgage rates will continue to strengthen homebuying demand, but due to a lack of new homes for sale and homeowners staying put longer, there will be fewer homes on the market in 2020 than in the past five years. More demand and less supply mean bidding wars will rebound in the first quarter. We expect about one in four offers to face bidding wars in 2020 compared to only one in 10 in 2019. This increase in competition will push year-over-year price growth up to 6% in the first half of the year, considerably stronger than the 2% growth seen in the first half of 2019. Supply and demand will become more balanced later in the year as more listings of new and existing homes hit the market, allowing price growth to moderate to 3%.

Prediction #2: 30-year fixed mortgage rates will stabilize at 3.8%

Throughout 2020, 30-year fixed mortgage rates will remain low, hovering around 3.8%. Faced with slowing economic growth, the Federal Reserve will keep interest rates low. Although the housing market is strong, weakness in other sectors, like manufacturing, is pulling down on the economy. Because investors are already bracing for the possibility of a recession, we don’t expect mortgage rates to fall much lower than 3.5% in 2020 even if the economy weakens. And even if the economy strengthens, we expect mortgage rates to stay below 4.1%.

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Prediction #3: For the first time, Hispanic Americans will gain more wealth from home equity than white Americans

In the next decade, Hispanic Americans will, for the first time, gain more home equity than white Americans. That’s because the majority of new homeowners are Hispanic, and home values in Hispanic neighborhoods are increasing faster than in white neighborhoods. There are more Hispanic homeowners in Texas than in any other state and Texas cities are likely to experience strong gains in home values over the next decade as people move here from more expensive places like San Francisco and Los Angeles.

Hispanic families will likely benefit from home-equity gains for generations to come. Hispanic Americans could tap their home equity to finance their children’s education or to start businesses. Over time, this will improve economic equality for Hispanic Americans.

Prediction #4: Climate change will become a bigger financial factor for homebuyers and sellers

In 2020, homebuyers and sellers will take the consequences of climate change into account when deciding to buy. The financial costs of climate change are already becoming more tangible as fire and flood insurance premiums rise. “More people are becoming hyper-sensitive to flood insurance and its costs,” said Houston Redfin agent Irma Jalifi. “They’re thinking about how the weather will change over the next decade and whether there will be more historic floods like we’ve experienced recently. I had a buyer back out of a deal because he found out the property required flood insurance.”

Over the next decade, higher insurance premiums in high-risk areas will make housing even less affordable to more people. And in areas with the highest risk, insurers may stop providing insurance altogether, which means it will be nearly impossible to secure a mortgage in those areas.

Prediction #5: Charleston and Charlotte will lead the nation in home price growth

Affordable Southeast cities like Charleston and Charlotte are attracting an increasing number of migrants from expensive cities, which will drive up home price growth in these areas. Charleston saw a 104% annual increase in the number of Redfin users looking to move in, relative to the number of users looking to move, out in the third quarter of 2019, and Charlotte saw a 44% increase. Migrants are attracted to the growing economies of Charleston and Charlotte—Microsoft is spending $23 million to expand its Charlotte campus, and in Charleston, the new Volvo plant is adding thousands of jobs.

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“A lot of migrants from up north or out west move to Charleston because it is such a lovely place—out of towners fall in love with our Cypress gardens and world-class beaches,” said Redfin agent and team manager Jacie Paulson. “The fact that we have an international airport means that companies are more willing to allow their remote employees to live here because it is easy to travel back and forth to headquarters. We also have a strong local economy with jobs at Boeing, Volvo, and in the military.”

Prediction #6: More city streets will become car-free

In 2020, we will see more cities favor green modes of transit and actively discourage driving. Some cities already have plans in the works—San Francisco’s Market Street will transform into a car-free corridor in 2020, and New York City drivers will have to pay to drive into the heart of the city beginning in 2021. In cities that become less car-friendly, those that frequently spend time in the city-center will place more value on a commute that doesn’t require a car and move to either the walkable city center or close to public transit. Meanwhile, some people will choose to avoid the city-center altogether and put a higher value on homes in the suburbs where they can work, play and live.

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Source: Redfin

Wishing you a Happy Holiday

and a Joyful New Year!

John Sauro, President

North Atlantic Mortgage Corp.

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