Home insurance isn't required by law but, most likely, your lender's going to require it to get a mortgage. Even if they didn't, it'd probably be in your best interest to have some coverage. After all, the most common home insurance claims are damage from wind, hail, water, fire, and lightning. In other words, wherever there's weather, there's a need for insurance. But while it's necessary, it isn't the first thing most buyers think of when considering the cost of owning a home. So what do home insurance rates look like these days? Well, according to one new report – which analyzed rates from every major carrier in every state – they're in flux. Nationally, the average yearly cost is $1,766, up 2 percent from the year before. But, depending on where you live, costs may have changed a bit more dramatically. In fact, some states saw double-digit increases from the year before, while others saw declines of up to 25 percent. The price also varies wildly from state to state. The most expensive insurance was in Oklahoma, where it costs more than $3,500 annually, while in Hawaii it's just $412 per year. In short, if you're buying a home and haven't already, it's a good idea to check rates in your area. (source)

The National Association of Realtors' Pending Home Sales Index is considered a good indicator of future home sales because it measures contract signings rather than closings. Generally speaking, contracts to buy are signed weeks before a sale is closed, which means a drop in the number of signed contracts will most likely show up as a decline in home sales the following month. In April, the NAR's index fell 3.9 percent, indicating that home sales will soon slow. The reasons for this are obvious: Spiking mortgage rates, on top of already high home prices, have buyers concerned about affordability. But, according to Lawrence Yun, NAR's chief economist, quickly changing conditions could soon stabilize, offering home buyers more certainty in the months ahead. “If mortgage rates stabilize roughly at the current level … and job gains continue, home sales could also stabilize in the coming months,” Yun said. “Home prices in the meantime appear in no danger of any meaningful decline. There is an ongoing housing shortage, and properly listed homes are still selling swiftly – generally seeing a contract signed within a month.” (source)

Home buyer preferences are usually pretty consistent. What home shoppers are looking for in a house or neighborhood doesn't change all that much from year to year. But, while that's typically true, the pandemic caused a shift in what buyers are looking for and, two years after its initial onset, the effects are becoming more clear. One recent example can be seen in an analysis of home-price growth and inventory levels in more than 1,000 cities nationwide. The analysis – which aimed to pinpoint the country's most popular markets – found that all of the top 10 most popular areas were suburban locations about a half-hour from the nearest city center. That's a change from the pre-pandemic era when urban areas saw faster price growth and higher demand than neighborhoods outside cities. The reason for the shift is fairly easy to see. The pandemic led to an increase in remote work, and with more Americans able to work from home, buyers began looking to live further from city centers, where they could have more space and privacy. (source)

Homes for sale continue to sell quickly, according to new numbers from the National Association of Realtors. Data from April shows 88 percent of homes sold during the month were on the market less than 30 days and the typical property was on the market just 17 days. Lawrence Yun, NAR's chief economist, says the housing market is a little unusual right now. “The market is quite unusual as sales are coming down, but listed homes are still selling swiftly ...” Yun said. It's true. Home sales in April fell 2.4 percent from the month before and are now 5.9 percent lower than they were at the same time last year. But despite buyer demand beginning to slow, the pace of sales remains fast. So what's happening? Well, the inventory of homes for sale is still lower than normal, which is why good listings don't last long. Even with fewer buyers active in the market, homes will continue to sell quickly until inventory improves. Luckily, relief may be on the way. In April, for example, the number of homes for sale spiked, rising 10.8 percent from the month before. That's good news for spring buyers. (source)

Affordability is a hot topic these days. After two years of rapid home price growth and the recent spike in mortgage rates, prospective home buyers are increasingly wondering about the cost. That's natural. When affordability conditions change quickly, it can lead to uncertainty. So what should home buyers expect in the coming months? Fannie Mae's Economic and Strategic Research Group has answers. According to their latest outlook, the group believes the housing market is headed for a slowdown in sales and construction activity. That's to be expected, especially while rates are rising. “Historically, rapid and substantial rises in mortgage rates have had the effect of slowing activity, which we reflect in our forecast,” Doug Duncan, Fannie Mae's senior vice president and chief economist, says. But a slower market should also bring slower price growth – which could help offset higher rates. Recent price increases have largely been driven by a supply imbalance. More buyers than available homes has lead to surging prices. When the market slows, and fewer buyers are active in the market, home prices should finally begin to calm down. (source)

Whether or not buying a home is considered affordable depends on a number of factors. Home prices, mortgage rates, and income all play a role. That's why, despite mortgage rate increases during the first quarter of the year, the share of homes considered affordable actually rose from the previous quarter. How's that possible? Well, a closer look at the numbers shows it's mostly due to Americans making more money. According to the National Association of Home Builders' Housing Opportunity Index, 56.9 percent of new and existing homes sold between January and the end of March were considered affordable to families earning the U.S. median income of $90,000. That's about $10,000 more than Americans were making one year earlier. Naturally, that made buying a home a little easier. But Jerry Konter, NAHB's chairman, cautions that, with costs continuing to rise, affordability gains aren't likely to continue. “The first quarter reading is a backward gauge, as surging interest rates, ongoing building material supply chain constraints and labor shortages continue to raise construction costs and put upward pressure on home prices,” Konter said. (source)

Mortgage rates have been moving higher in recent months. Which means, if you're currently shopping for a home, your prospective monthly mortgage payment has too. But with rates moving quickly, it can be hard to keep up with what it means for your budget. So what should you know about recent mortgage rate increases and how they've affected monthly payments? Well, the Mortgage Bankers Association's new Purchase Applications Payment Index tracks median mortgage payments and how they change from month to month. According to the index – which covers data through the end of March – the national median mortgage payment was $1,653 in February. In March, it moved up to $1,736. With rates up about a point over the same time period, that may be less than you expected. Of course, an extra $83 a month makes a difference, especially for first-time buyers. Fortunately, though, the increase was even less for buyers with smaller loans. In fact, the index found borrowers applying for lower-payment mortgages only saw a $35 increase month over month. (source)

A housing market with too few homes for sale can be frustrating for home buyers. For home sellers, though, it's an opportunity. Evidence of this can be found in ATTOM Data Solutions most recent U.S. Home Sales report. The report covers the first quarter of 2022 and shows the typical single-family home sold at the beginning of the year generated a gross profit of $103,000. That's up from $75,000 one year ago at the same time. Rick Sharga, ATTOM's executive vice president of market intelligence, says though rapidly rising prices have pushed profits higher, they're likely to slow down soon. “Home prices simply can't continue to go up as rapidly as they have for the past few years ...” Sharga said. “Ultimately, as affordability worsens, price appreciation should slow down, and we may even see modest price corrections in some markets.” It may have already started. ATTOM's report found home seller profits actually fell from the previous quarter. In fact, during the fourth quarter of 2021, the typical home sale generated $107,000. (source)

There is an expectation that this year's market won't be quite as competitive as last year's. In 2021, homes sold quickly, bidding wars were common, and buyers had to be prepared and decisive when they found a house that fit their needs. A significant share of homes sold were on the market for just weeks and, in some cases, only days before being swept up by an interested buyer. But while the housing market may not be as hot as last year, it will still be hot. In other words, home buyers should be ready to act fast, if they find a good house. But how fast are you willing to be? How long after seeing a house would you need to think it over before making an offer? One recent survey of prospective home buyers found two thirds of respondents willing to make an offer within three days of viewing a home. Some were willing to move even faster, with 20 percent saying they'd make an offer immediately. It's a good question for potential buyers. How comfortable are you making an offer on a home without time to deliberate and debate its pros and cons? (source)

There are two ways of looking at today's housing market. On the one hand, buying conditions have gotten more challenging, as prices and mortgage rates have risen. On the other hand, the market looks like it's starting to cool off, after an overheated year where the number of interested buyers far outpaced the supply of homes for sale. The National Association of Realtors most recent Pending Home Sales Index is evidence of this. The index shows the number of contracts to buy homes fell 1.2 percent in March, the fifth consecutive month of declining activity. Lawrence Yun, NAR's chief economist, says declining buyer activity may help reduce competition and bidding wars, which would be welcome news for spring home shoppers. “The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions,” Yun said. A calmer market would also help slow the rate of price increases, which could offset some of the effects of rising mortgage rates. (source)