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Existing Home Sales Rising

With today’s mortgage rates still firmly in the 3s, the housing market remains strong.

5.08 million existing homes sold on a seasonally-adjusted, annualized basis last month, an increase of 2 percent from the year prior and the best February for home sales since 2007.

Prices are up, too.

With the current scarcity of homes for sale nationwide, active buyers are finding it hard to find homes to purchase, and negotiations are often difficult.

Multiple-offer situations are common in many U.S. markets. Buyers in 2017 may face higher monthly payments because of rising prices in housing.

Thankfully, low- and no-down payment mortgages remain readily available, and banks are approving purchase loans at a rapid clip.

According to data from Ellie Mae, more purchase mortgage applications are making it to closing than during any period this decade.

It’s an excellent time to consider homeownership.

Click to see today’s rates (Mar 28th, 2016)

Existing Home Supply Still “Bull Market”

The National Association of REALTORS® (NAR) recently released its January 2016 Existing Home Sales report, which showed 5.08 million homes sold on a seasonally-adjusted, annualized basis.

The reading marks a 2 percent increase from the year prior.

Existing Home Supply worsened slightly, rising roughly two weeks to 4.4 months nationwide.

This means that, at today’s pace of sales, the country’s entire supply of MLS-listed homes would be sold prior to July 4, which suggests that there just aren’t enough homes for sale to meet the market’s needs.

There are now just 1.88 million homes for sale countrywide.

Ask any of today’s active home buyers — home supply is tight. Furthermore, the homes that are available for sale are selling quickly.

Properties were typically listed for sale for 59 days in February before going under contract, which is the fewest number of days for a February since NAR started tracking such data.

35% of all homes sold in less than one month.

First-time buyers account for slightly more than three-in-10 buyers; and real estate investors, many of whom use the 5-10 Properties program to finance more than four homes, represented less than two-in-ten.

Click to see today’s rates (Mar 28th, 2016)

Repeat Buyers Moving Up To Larger Homes

Repeat buyers are the majority of today’s housing market.

A “repeat” buyer is one who has owned a home within the last three years.

Often, repeat buyers purchase homes which are more expensive than their current ones. This is one reason why repeat buyers are sometimes called “move-up” buyers — they’re buyers who are “moving up” to bigger, more valuable, homes.

However, unlike prior months, National Association of REALTORS® data shows move-up buyers occupying low-to-middle price ranges.

• Home sales between $0-100,000 : +17% since last year


• Home sales between $100,000-$250,000 : +45% since last year


• Home sales between $250,000-$500,000 : +28% since last year


• Home sales between $500,000-$750,000 : +6% since last year


• Home sales between $750,000-$1,000,000 : +2% since last year


• Home sales over $1,000,000 : +2% since last year

Home sales are faring better at lower price points as compared to higher ones. This may be a function of the improving jobs market; or access to home affordability products such as the 3% down HomeReady™ home loan.

Data may also be influenced by a trickle-down effect for housing in smaller markets nationwide.

In months past, housing has been led by the San Francisco, California housing market; the Seattle, Washington housing market; and the Denver, Colorado housing market — each of which has expanded rapidly and has been characterized by high home sale prices.

Other, smaller markets may now be seeing similar growth, affecting NAR Existing Home Sales data.

Click to see today’s rates (Mar 28th, 2016)

Buying Homes With Low Or No Downpayment

According to the National Association of REALTORS®, first-time home buyers accounted for 30% of February home resales.

That number might have been higher, the trade group said, if home affordability were improved. Renters have expressed a concern that homes are too expensive to purchase and to afford on a monthly basis.

Yet, many feel pressured to buy before home affordability worsens.

Rents are predicted to rise at twice the rate of home prices in 2016; and few people expect mortgage rates to fall from their current levels near 3.75 percent.

Homes may be more affordable than you think, however.

For instance, you don’t need 20% down to purchase a home and there are some good reasons to avoid putting 20% down.

There are a myriad of low- and no-downpayment loans available to today’s buyers.

The most common low-downpayment loan remains the FHA loan, which has been available to U.S. homeowners since the 1930s.

FHA loans account for close to 1-in-4 of all purchase loans and require just 3.5% down. FHA loans offer flexible mortgage approval terms and include an allowance for average and below-average credit scores.

Another low-downpayment option is the conventional 97% program. This government-backed loan tends to work well for buyers with above-average credit scores who are buying single-family, detached properties (i.e. not condos or town homes). Only 3% down is required and buyers can receive cash downpayment gifts.

Another 3% down program is the newly-released HomeReady™ mortgage.

Aimed at multi-generational families living under the same roof, HomeReady™ is backed by Fannie Mae and can be used by anyone. It’s an interesting program offering below-market mortgage rates and reduced mortgage insurance.

You can read a complete HomeReady™ FAQ here.

For buyers in rural and suburban areas, the USDA loan can be an excellent no-downpayment option, too. Backed by the U.S. Department of Agriculture, USDA loans provide below-market mortgage rates and cheaper mortgage insurance rates than comparable low-downpayment products.

VA loans are another good 100% financing option.

For military borrowers, VA loans are available as part of the G.I. Bill, granting access to extra-low mortgage rates and never requiring mortgage insurance.

Lastly, for jumbo mortgage borrowers, the changing mortgage market has brought the 80/10/10 loan back into availability. This has helped spur the luxury housing market forward and is among the reasons why home sales over $750,000 have stayed strong.

What Are Today’s Mortgage Rates?

The U.S. housing market is advancing through early-2016. It’s an excellent time to consider your options as a buyer; and to plan for your future as a homeowner.

Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Click to see today’s rates (Mar 28th, 2016)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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