Refinance Demand Stays Strong

Mortgage rates in 2020 experienced record low after record low throughout the year.  The early weeks of 2021, however, have seen rates begin to tick up a bit.  This slight increase in rate resulted in mortgage demand for refinances to increase by 20% last week versus the previous week.  According to the Mortgage Bankers Association’s (MBA) seasonally-adjusted index, this was the highest level since last March, with overall volume 93% higher than a year ago.  In addition to refinance volume, purchase applications rose 8% for the week, with overall volume 10% higher than a year ago.

On the flipside, although rates have ticked up recently, Federal Reserve Chairman Jerome Powell announced his commitment to keeping rates low for the foreseeable future.  In a Q&A session presented by Princeton University, Powell stated, “When the time comes to raise interest rates, we’ll certainly do that, and that time, by the way, is no time soon.”  Despite the slight uptick in rates, it appears we will continue to experience the same ultra-low interest rate environment that existed all of 2020, through the early part of 2021.



Housing Demand Continues to Drive Pricing

CoreLogic released their Home Price Index last week, and it showed that home prices across the nation increased in price by 1.1% in the month of November.  Over the last twelve months, their report showed that homes increased in price by 8.2%. Looking into the future, they are forecasting homes to appreciate by about 2.5% over the next twelve months, where other analysts are seeing the rate of appreciation closer to five or six percent.  Either way, homes are still selling very rapidly and at a premium due to the high levels of demand.   

Frank Martell, who is the President and CEO of CoreLogic said, “The housing market performed remarkably well in 2020 despite the volatile economic state. While we can expect to see lingering effects of COVID-19 resurgences and subsequent shutdowns in the early months of 2021, vaccine distributions and stimulus actions should revitalize economic activity and keep home purchase demand and home price growth strong.”

Speaking of demand of homes, the National Association of Realtors or NAR, showed that pending home sales, or sales of existing homes with signed contracts increased by 16.4% over the last year.  This a very large increase of pending sales, especially with a 22% lower housing inventory level.

With low, aggressive interest rates and very strong levels of demand, the housing market is poised for another very strong year and proves it is still a great time to purchase a home.


US Home Prices Rise at Highest Pace in Six Years!

According to last week’s S&P Case-Shiller 20-city home price index, US home prices jumped 7.9% in October, compared to twelve months ago.  This robust move marked the largest jump since June of 2014.  Analysts continue to point to strong demand for housing and limited inventory as the driving forces behind home prices soaring.  In addition, indicators also point to the impact that the Covid-19 pandemic has had on the housing market demand.  Millions of Americans are working from home and are looking for homes that have home offices, larger kitchens, or maybe even space for a home gym.  Other indicators show current homeowners looking to flee their urban apartments and move to the suburbs to find a new home. 

Overall, Interest rates are expected to remain at ultra-low levels.  Housing inventory is expected to remain tight, although new home construction is beginning to ramp up.  New homeowners are looking to enter the housing market.  All of these factors will continue to be the driving force for home prices continuing to rise in 2021.

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for.


More Home Inventory = More Homes Sold


The National Association of Realtors released their Existing Home Sales report last week, and it showed that existing home sales fell in the month of November.  This was the first time in five months where we didn’t see gains with this number.  Despite that, the year over year number showed that existing home sales were 25.8% higher!  That is enormous growth, and it is even stronger when you take into account how low housing inventories are.

Speaking of inventory, total housing inventory declined yet again and is now at 1.28 million homes, which represents a decline of about 22% from a year ago and a 2.3-month supply at the current sales pace.  The previous read showed a 2.5-month supply of homes.  On average homes were sold in 21 days, proving and assuring us how demand for homes is still very strong even at the current level of prices.

In regards to prices, median existing home price increased by 14.6% since last November and is now at $310,800.  Remember this is median price, so this shows the middle number in between all the homes sold above it and below it.  This does not mean appreciation is at a 14.6% level.  A more accurate read on appreciation is closer to 7% as explained by the Case-Schiller Index. 




Mortgage Originations Set to Break All-Time Records in 2020! 

Amidst dealing with the effects of the global COVID-19 pandemic, mortgage originations in 2020 are set to be the highest of all time.  According to industry research firm, Inside Mortgage Finance, lenders extended $2.8 trillion in mortgages in the first nine months of the year, with no signs of slowing down during the final quarter.  Analysts expect these numbers to surpass the prior highest recorded mark of $3.7 trillion in 2003.  Guy Cecala, Chief Executive of Inside Mortgage Finance, stated, “2003 was a record nobody thought would ever be achieved again.”
These record numbers are staggering when compared to the millions of individuals in and out of work due to the pandemic, as well as the difficulties that realtors have faced showcasing homes for sale.  Clearly offsetting those challenges are interest rates, which hit their lowest levels of the year during the week of December 7th.  That new record low represented the 15th record low of the year, and the 2nd in as many weeks.  These record-low interest rates are the driving force for homeowners looking to refinance their current home, or for new homeowners looking to capitalize and enter the housing market!

Call your Advisors Mortgage Loan Officer today to discuss the current market in more detail and to learn what you qualify for. 



Showing results 1 - 5 of 161