San Diego Real Estate and Community News

June 29, 2022

New Home Supply Hits 14-Year High

The low supply of homes for sale has been the housing market's primary issue for years now. That's why an unexpectedly positive report from the U.S. Census Bureau and the Department of Housing and Urban Development is an encouraging sign for home buyers. The report shows the inventory of new homes for sale in May was at a 14-year high, with a 7.7-month supply available at the current sales pace. That's good news for home shoppers, since a growing inventory of available new homes is the fastest way to balance the market. It not only provides buyers with more houses to choose from, but also helps relieve upward pressure on prices. Of course, the number of homes for sale is still much lower than it needs to be, but the recent gains may be a sign that the housing market is trending toward better balance and fewer home price spikes. Also in the report, new home sales increased 10.7 percent in May from the month before. The improvements were unexpected, with economists polled prior to the release predicting sales would fall month over month. (source)

June 27, 2022

Home Buyer Affordability Stable In May

For home buyers, affordability is always a top concern. That's why news of home price increases and rising mortgage rates has some buyers feeling hesitant about their home purchase plans. But while affordability conditions have certainly changed from last year, one new measure of monthly mortgage payments found they were relatively flat in May. The data, from the Mortgage Bankers Association's monthly Purchase Applications Payment Index, measures median payments across the country based on recent loan applications. In May, the index found mortgage payments were only $8 higher than they were in April. In fact, the median payment was $1,897 in May and $1,889 the month before. The increase was even smaller when looking at lower-payment mortgages, which increased to $1,241 from $1,236. Of course, whether or not affordability conditions continue to remain stable in the months ahead remains to be seen. But after the sharp increases we saw during the first four months of the year, a relatively stable May is a welcome break for buyers. (source)

June 22, 2022

Home Sales Return to Pre-Pandemic Levels

New data from the National Association of Realtors shows sales of previously owned homes fell in May. Existing home sales were down 3.4 percent from the month before and 8.6 percent from one year earlier. The decline is evidence that the market is beginning to level off, after two years of frenetic activity. Lawrence Yun, NAR's chief economist, says sales trends are starting to return to where they were pre-pandemic. “Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” Yun said. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.” But not all aspects of the market have returned to pre-pandemic conditions. For example, homes are still selling faster than normal. In fact, the typical listing remained on the market just 16 days in May and 88 percent of homes sold were on the market less than a month. (source)

June 21, 2022

How Much Should You Budget For Utilities?

You can certainly buy a home without thinking about your budget, but it's not advisable. Without a clear understanding of what you'll be spending and where, you're more likely to get yourself into financial trouble. After all, what you can afford is often different than what you can afford comfortably. That's why it's smart for home buyers to think about their monthly expenses before heading out to look at listings. That means considering, not only your prospective monthly mortgage payment, but also how much you'll be spending on everything from property tax to groceries. One easily overlooked cost of homeownership is utility bills. Things like electricity, water, gas, heat, and air conditioning aren't free and, with costs rising, they can add up. So what should you expect? According to one recent analysis, homeowners spend about $400 a month on utilities on average. That includes around $115 for electricity, $110 for cable and streaming services, $65 for natural gas, and $70 for water. Of course, where you live and how much you use can affect how much you'll pay. But coming up with a rough estimate of what your utility bills will be each month is an important step, as it will help give you a more accurate idea of how much house you can comfortably afford. (source)

June 15, 2022

Mortgage Credit Availability Tightens In May

The standards lenders use to determine whether or not a borrower is approved for a mortgage aren't fixed. There are times when it's easier to qualify and times when it's more difficult. Because of this, the Mortgage Bankers Association tracks whether lending standards are loosening or tightening. Their monthly Mortgage Credit Availability Index measures how easy it is for borrowers to get a mortgage based on several factors, including credit scores, loan types, and loan-to-value ratios. In May, the index fell slightly, indicating that lending standards have tightened from the month before. Joel Kan, MBA's associate vice president of economic and industry forecasting, says most of the tightening occurred for government and jumbo loans. “Last month's tightening was most notable in the government and jumbo segments of the mortgage market,” Kan said. “The decrease in government credit was driven mainly by a reduction in streamline refinance programs, as mortgage rates increased sharply through May, slowing refinance activity.” The index component measuring conventional loans fell less than 0.5 percent. (source)

June 13, 2022

Active Listings Grow For First Time In Years

The number of homes for sale has been lower than normal for years now. Home shoppers looking for a home to buy have had to compete over limited listings, which has led to bidding wars, rising prices, and frustration. But things may finally be changing. In fact, the number of active listings rose in May for the first time in three years, according to the National Association of Realtors' consumer website. The national inventory of active listings increased 8 percent year over year, with newly listed homes up 6.3 percent. That's the first year-over-year improvement since June 2019. It's also encouraging news for home buyers, who have been dealing with a fast-paced market and challenging affordability conditions since the pandemic sent already low inventory even lower. But while the gains are welcome news, it's only a start. Which means, though listings are improving, challenges remain. Inventory is still lower than normal, home prices are still up, and listings continue to sell quickly. In other words, the tide may be turning but, for now, home buyers still have to be prepared. (source)

June 8, 2022

Americans Say It's The Right Time To Sell

Fannie Mae's monthly Home Purchase Sentiment Index measures how Americans feel about the housing market and economy. It asks respondents whether they think it's a good time to buy or sell a house, whether they believe home prices and mortgage rates will rise or fall, and how they feel about their job and financial situation. In May, the index was relatively unchanged from the month before but saw an increase in the number of participants who said they think now is a good time to sell a house. In fact, 76 percent of survey respondents said they feel the market is right for sellers. Buyers, on the other hand, didn't fare as well. Doug Duncan, Fannie Mae's senior vice president and chief economist, says Americans are feeling pessimistic about buying. “Respondents' pessimism regarding home buying conditions carried forward into May, with the percentage of respondents reporting it's a bad time to buy a home hitting a new survey high,” Duncan said. That pessimism is due, in part, to recent mortgage rate increases. But while spiking rates may have dampened buyer optimism, respondents don't expect them to continue. Survey results show an increasing share of participants who said they think rates will fall in the coming months. (source)

June 6, 2022

How Many Showings Does The Typical Listing Have?

Every homeowner with a home to sell wants to attract qualified buyers. After all, the more interest there is in your home, the more likely it is that you'll get a good offer. One way to measure interest is to pay attention to how many buyers are scheduling showings to tour your house. But how many showings does a listing typically see? Well, according to one recent analysis, the nationwide average number of showings per listing was 8.49 in April. In the top 25 markets, though, the average was closer to 15. Of course, a lot depends on the home you're selling and its location. For example, showings have slowed this spring compared to last year's competitive pace, but some regions have seen a bigger drop in activity than others. Wherever you are, though, there are bound to be buyers. Even in an unusual spring market, where mortgage rates and low inventory have dampened demand, there were still more than 100 markets in April averaging double-digit showings per listing. (source)

June 6, 2022

Typical Mortgage Payment Increased In April

Calculating how much house you can afford can be difficult. Not only do you have to take your budget and lifestyle into account, you also have to keep up on changes in the housing market. That's particularly tricky these days. Quickly changing affordability conditions mean potential buyers have to regularly recalculate costs when considering which available homes are a good financial fit. Fortunately for home shoppers wondering about their potential costs, the Mortgage Bankers Association keeps a monthly measure of typical mortgage payments based on loan application data. In April, the data shows payments rose $153 from March, due mostly to higher mortgage rates. The median payment applied for by April applicants was $1,889, with FHA loan applicants seeing the most affordable payments at $1,374. Edward Seiler, MBA's associate vice president of housing economics, says affordability conditions have become more challenging since the start of the year, but noted that “... prospective home buyers should start to see moderation from the double-digit price appreciation reported for well over a year in most of the country.” (source)

June 1, 2022

When Will Home Price Increases Slow Down?

These days, it seems like most housing market forecasts are predicting home price increases will begin to slow at some point this year. Whether it's due to improving inventory levels as the number of homes for sale rises or from slower demand due to higher mortgage rates, most industry outlooks say the price spikes of the past couple of years will soon fade. But when exactly? “Those of us who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer,” says Craig J. Lazzara, managing director at S&P Dow Jones Indices. “Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call.” According to S&P's most recent home price index, which covers data through the end of March, home prices continued to increase at a record-breaking pace as the spring season began. In fact, year-over-year numbers show price increases actually accelerated from the previous month's report. But despite the first-quarter increases, market fundamentals still point to a better balanced market in the months ahead, with prices moderating as levels of supply and demand become more in line. (source)