The National Association of Realtors' Pending Home Sales Index measures the number of contracts to buy homes signed each month. Because it tracks signings and not closings, the index is a good indicator of future sales of existing homes. In February, it was down 4.1 percent, marking the fourth consecutive month transactions fell. Lawrence Yun, NAR's chief economist, says the reason for the decline is simple. “Pending transactions diminished in February mainly due to the low number of homes for sale,” Yun said. “Buyer demand is still intense, but it's as simple as 'one cannot buy what is not for sale.'” Fortunately, there are expectations that the inventory of homes for sale will improve this year, which will help slow price increases and offer buyers more options. However, those improvements will be gradual and home buyers in the coming months should still be prepared for a competitive market, where good listings attract multiple interested buyers. (source)

In an interconnected world, events in other countries have an effect on our economy. That's certainly the case these days, according to Fannie Mae's Economic and Strategic Research Group's latest monthly outlook. According to the group, the Russian invasion of Ukraine, along with existing supply-chain issues, has caused considerable downside risks to the U.S. economy and housing market. Fortunately for home buyers and sellers, though, Doug Duncan, Fannie Mae's senior vice president and chief economist, says the housing market should weather those risks more easily than other markets. “Housing is currently acting as support to an otherwise slowing economy, although it is adding significantly to inflation,” Duncan says. “Even as interest rates are rising and reducing affordability, demographics are still strong supports for demand, and the paucity of existing home supply is supporting new construction and sales.” Duncan believes demand for home purchase loans should hold up well in the current environment and adds that, even with rates rising, they're still well below what's been considered normal historically. (source)

Homeownership has its perks. Among them, it's a financial investment. When home prices rise, homeowners benefit. And last year, homeowners benefited in a big way. In fact, according to one new analysis, home values rose higher than the median income in 25 of 38 of the metropolitan areas included in the study. In other words, homeowners gained more in equity than the median worker made in income last year. Home appreciation even topped $100,000 in 11 of those cities. In San Jose, for example, the typical home grew $229,277 in value, while the median income was $93,000. Even in cities with lower rates of appreciation, like St. Louis, homes still increased nearly $30,000 over the year. Naturally, last year's home price growth was atypical. But while most years don't see the equity gains that 2021 did, values do rise more often than not. That means, home buyers this spring will most likely financially benefit from owning a home by next year at this time. (source)

Sales of previously owned homes fell in February, according to the National Association of Realtors. Sales were down 7.2 percent from the month before and 2.4 percent from last year at the same time. There were a number of factors that likely contributed to the decline, including higher mortgage rates and a lower than normal number of homes for sale. But while challenges remain, there are signs a better balanced market may be on the way. Lawrence Yun, NAR's chief economist, says inventory is beginning to improve. “The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers' savings,” Yun said. “However, I expect the pace of price appreciation to slow as demand cools and supply improves somewhat due to more home construction.” He may be right. Recent data shows that not only has the pace of new home construction increased so far this year, but the number of existing homes for sale in February rose as well. Still, the typical property was only on the market 18 days during the month, down a day from January. That means buyers still need to be prepared for a fast-moving market. (source)

The housing market needs more homes. They are plenty of buyers but not enough houses for sale. That leads to higher prices and more competition for available listings. Fortunately, though, new home construction is expected to increase this year and, according to newly released numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, it already has. Their February new residential construction report shows the number of homes that began construction during the month was 22 percent higher than last year. Additionally, the number of single-family homes that completed construction was 12 percent higher than the month before. That's good news for the market and potential home buyers, as new home construction is the quickest solution to the market's inventory problem. If the trend continues, and more new homes become available for sale, it'll help relieve upward pressure on home prices and give buyers more options when shopping for a home to buy. (source)

For the most part, homes are all the same. They all have a kitchen, bedrooms, bathrooms, and a main living area. Those are givens. Aside from the number and size, those rooms aren't what get buyers excited, though. For home buyers, the things that really set a listing apart are the details, bonus rooms, and style of a house. A home's features and aesthetic can make it sell faster and at a higher price than other homes, even in the same area. But what are the features that today's home buyer desires most? Well, according to one recent analysis, there are several. Among the top features that buyers will pay more for, a steam oven tops the list, followed by modern farmhouse or nautical style, new appliances, shiplap, and a strong internet connection/access to broadband. A metal roof, heated floor, and a dog house also make the top 10 features that have homes selling at a premium. The top feature that will sell a home faster is seismic retrofitting – which makes a home more resistant to earthquakes. Other desired features that lead to quick sales are an EV charging station, drought-resistant landscaping, midcentury style, and a home office. (source)

According to the Mortgage Bankers Association's Weekly Applications Survey, average mortgage rates fell last week for the first time in 12 weeks. Rates were down for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Joel Kan, MBA's associate vice president of economic and industry forecasting, says the decline was caused by the invasion of Ukraine. “Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed U.S. Treasury yields lower,” Kan said. “Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other.” Lower rates helped push demand for mortgage applications higher than the week before, with significant increases seen in both refinance and purchase activity. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

You don't need to be an economist to understand supply and demand. It's a pretty simple concept. When supply is low and demand is high, prices rise. That's what's been happening in the housing market. Home prices have been increasing because a lot of people want to buy a house but there aren't a lot of homes available to buy. Fortunately, though, there's reason to believe the inventory crunch that's pushed prices higher may be starting to ease. According to a new report from the National Association of Realtors' consumer website, the number of active listings – while still low – has showed improvement. In February, listings were 25 percent lower than one year earlier. That's down from 28.4 percent in January. Additionally, the last two weeks of February saw more new home sellers enter the market than during the same period in 2021. In fact, the final week of the month saw new listings rise 2.1 percent over year-before numbers. While the gains may seem small, they're an encouraging sign for buyers, since the number of listings will likely grow as the spring sales season gets underway. (source)

Figuring out how much your down payment will be and where it'll come from is a big part of getting ready to buy a house. Whether you're using money from the sale of your current home or saving from scratch, you have to have an idea of how much you'll have available. Naturally, how much you'll need depends on the specific house you're hoping to buy and the terms of your loan. But what does the typical down payment look like these days? Well, according to one recent analysis, the median down payment on single-family homes purchased in the fourth quarter of last year was $26,000. That's up from the previous year, when it was $21,891, but actually 1 percent lower than in the third quarter. Whatever the case, buyers should know they have options. Though widely recommended, a 20 percent down payment isn't required. In fact, most home buyers put down less. Last year, for example, the typical down payment for first-time buyers was 7 percent, while repeat buyers averaged a down payment of 17 percent. (source)

When there are fewer homes available for sale, those that are on the market receive more interest. After all, it's easier to get buyers interested in your home, if there aren't many others to see. That's the case these days. Simply put, it's a good time for homeowners who want to sell. How good? Well, according to one recent report, very good. The analysis looked at the average number of home showings per listing in January, which is a pretty accurate way to measure current buyer demand. What they found was – even at a time of year when housing market activity is typically slow – the average number of home showings reached double digits in 83 markets across the country. Nationally, showings were up nearly 8 percent over year-before numbers, and in the top markets they were closer to 15 percent higher than last year. Based on the data, there's pretty good evidence that the market is still hot, and primed for home sellers, heading into the spring sales season. (source)