Luxury isn't easy to define. The dictionary says it's “the state of great comfort and extravagant living.” But since that leaves a lot to interpretation, we all have different ideas about what luxury really means. This is easy to see when thinking about the housing market. After all, a luxury home in one market can be vastly different than a luxury home in another. So, in order to get a better view of recent home sales, one new report broke them down into five price tiers. The results show that homes in the top – or luxury – tier are selling at a much faster pace than those in the middle and lower tiers. In fact, sales of luxury homes were up 60.7 percent from the year before, while mid-tier priced homes rose 14.8 percent and affordable homes were up 6.8 percent. In short, the luxury home market is far outpacing the rest of the housing market, and it's not even close. Similarly, vacation- and second-home sales are also seeing a year-over-year bump, with demand for second homes up 100 percent in October. 

The S&P Case-Shiller Home Price Indices isn't the only index tracking home-price activity, but it's among the most closely followed. And, according to their most recent release, prices are rising. In fact, they were up 8.4 percent year-over-year at the end of October. Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, says prices were increasing pre-COVID and have only accelerated since then. “We've noted before that a trend of accelerating increases in the National Composite Index began in August 2019 but was interrupted in May and June, as COVID-related restrictions produced modestly-decelerating price gains,” Lazzara said. “Since June, our monthly readings have shown accelerating growth in home prices, and October's results emphatically emphasize that trend.” The last time home prices increased this quickly was more than six years ago. However, though recent increases have been significant, they're mostly due to a lack of homes available for sale this fall. As spring approaches, and more homes are listed for sale, price spikes should begin to moderate

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates were relatively unmoved last week from the week before. Rates for 30-year fixed-rate mortgages with conforming loan balances were flat from one week earlier, while jumbo loans, loans backed by the FHA, and 15-year fixed-rate mortgages all saw declines from the previous week. Joel Kan, MBA's associate vice president of economic and industry forecasting, says rates remain at record lows. “Mortgage rates are closing the year at record lows,” Kan said. “The 30-year fixed rate … is a full percentage point below a year ago.” But while Kan says low rates are helping the market end the year strong, he also notes that tight inventory and higher prices may cause affordability challenges for entry-level and first-time buyers in 2021. “Housing affordability will be worth monitoring next year,” he said. Year-over-year, demand for loans to buy homes was up 26 percent as of last week. Refinance activity was 124 percent higher than one year ago. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

In the minds of home buyers, there are two big numbers to consider. One is the monthly mortgage payment. Calculating what a particular house will cost you each month is an important determiner of whether or not you can really afford it. But you can't calculate your prospective monthly mortgage payment without knowing first what your down payment will be. That's why the down payment is the other number home buyers have to grapple with before buying. Figuring out how much you will potentially have to put down on a house and where you will get the money are among the first questions prospective buyers should address. So what should they expect their down payment to be? Well, it depends on where they're buying, of course. A down payment in San Francisco is going to be a lot different than a down payment in Kansas City. But, according to one recent analysis, the median down payment nationally, during the third quarter of 2020, was $20,775. That's 6.6 percent of the median sales price for homes purchased during the same period. It's also good place to start when thinking about how much you'll need to put toward your next house.

In the past, shopping for a house to buy involved calculating how difficult your commute to work would be. Whether it was measuring the distance to public transportation, the nearest highway, or timing the total drive, home buyers had to consider their daily routine before making an offer. Then, COVID hit and changed everything. Now, with more Americans working from home, commutes are becoming less of a factor in home buying decisions and it's changing how and where we buy. For example, a recent survey found that 40 percent of Americans who have recently moved or plan to soon are relocating more than 100 miles away – half of them are moving over 500 miles away. Additionally, real-estate professionals report that they are seeing more city-to-suburb moves and are getting far fewer requests for homes close to transportation options. And now it's looking like the change will be permanent. In fact, three out of four consumers who have moved or are planning a move say they don't plan to return to the area where they lived pre-pandemic.

Typically, this is the time of year when buyers put a pause on house hunting and wait until spring. However, this year is different. Evidence continues to show that the housing market is defying seasonal trends as we head into winter. For example, according to one recent analysis, buyer demand is still surging in many markets across the country, with some seeing twice as many house showings per listing compared to the same time last year. In fact, several markets have recorded double-digit showings per listing – significantly higher than the current average of six per listing. In other words, there are still plenty of interested buyers. So why haven't we seen a seasonal slowdown? Well, one factor is COVID-19. Delayed demand from spring has been pushed later into the year. Another factor is the combination of favorable mortgage rates and low for-sale inventory. Together, they've driven traffic 60.9 percent higher than it was last year at the same time – with the Northeast up 65.5 percent and the West seeing traffic 64.7 percent higher than one year ago.

The idea of packing up your things and moving somewhere new can be exciting – especially if your current living situation isn't ideal. So it's not surprising that a recent survey found nearly half of Americans say they're considering a move in the next year. According to the results, 46 percent of respondents said they're thinking about moving. Among them, 27 percent said they're looking for a new place in their current area, 12 percent were hoping to find a home in another part of the state, and 8 percent said they're considering moving out of state. But what are the main factors causing so many of us to think about starting fresh somewhere else? Well, most respondents said money. In fact, 44 percent of people who said they're considering moving said they were doing so because their current home was too expensive. Other reasons participants offered included that their home was too small, they wanted different features, they'd rather live in a different part of town, and they're unhappy with the management at the property they're renting.

The S&P Case-Shiller Home Price Indices are among the most closely followed measures of US home values. According to their most recent release, their National Home Price Index showed a 7 percent year-over-year gain in September. It was the biggest increase in six years and a significant spike from the previous month, when prices were only up 5.8 percent from one year earlier. Craig Lazzara, managing director and global head of index investment strategy at S&P, says it's too soon to determine whether the increases are due to the market catching up from COVID-related declines earlier in the year or sign of upcoming strength. “A trend of accelerating increases in the National Composite Index began in August 2019 but was interrupted in May and June, as COVID-related restrictions produced modestly-decelerating price gains,” Lazzara said. “This month's increase may reflect a catch-up of COVID-depressed demand from earlier this year; it might also presage future strength, as COVID encourages potential buyers to move from urban apartments to suburban homes.”

The Mortgage Bankers Association's Mortgage Credit Availability Index measures how easy or difficult it is for borrowers to secure financing. If the index increases, that means lending standards have loosened and borrowers should expect to have an easier time qualifying for a loan. When it tightens, the opposite is true. In October, the MBA found the index up 2.3 percent from the month before. Joel Kan, MBA's associate vice president of economic and industry forecasting, said it was the first increase since July. “Credit availability increased in October for the first time since July,” Kan said. “The ongoing economic recovery and improving labor market led to a rise in credit supply for various loan types.” Among them, there was an increase in credit availability for low credit score loans and loans with higher loan-to-value ratios. Still, despite the improvement, credit availability remains tighter than it's been in recent years. In fact, the index is at a level last seen in 2014

There are different types of competition. Some are more enjoyable than others. Competition on a golf course, for example, can be fun, while in the housing market, competition can cause buyers and their budgets stress. That's why a new report detailing how many homes for sale received multiple offers in October offers good and bad news. The good news is that the number of homes facing competition during the month fell slightly from the month before and is almost 3 percent lower than its peak in August. But while competition for available homes has calmed down a bit since the height of the summer market, it's still high. In fact, 56.8 percent of homes sold in October faced at least one competing bid, according to the report. And, depending on which market you look at, the number can get even higher. Hot markets like Salt Lake City, San Diego, San Francisco, and Austin lead the list of the most competitive markets. However, in Las Vegas, Miami, Chicago, and Detroit – which were among the least competitive metros – you're less likely to find yourself in a bidding war.