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With mortgage rates and home prices as high as they’ve been, many would-be buyers stayed out of the housing market in 2023. But the latest LendingTree data shows that of those who remained active in the market, first-timers were much more common than those who already owned a home.

Through a nationwide analysis of mortgage offers given to users of the LendingTree platform in 2023, we found that nearly 2 out of 3 went to first-time buyers. Here's what else we found. 

  •  Nationwide, 65.25% of mortgage offers made on the LendingTree platform in 2023 went to those who identified as first-time homebuyers. 
  • The states where the highest shares of mortgage offers are given to first-time buyers are New York, California and New Jersey. 77.30% of offers in New York went to first-time buyers. The shares were 73.15% and 72.22% in California and New Jersey. 
  • The states where the lowest shares of mortgage offers are given to first-time buyers are South Dakota, Alaska and Arkansas. In South Dakota, 54.29% of mortgage offers went to first-timers. That figure was only slightly higher in Alaska, at 54.38%. It was 56.19% in Arkansas.
  • On average, loan amounts for first-time buyers across the 50 states are $49,021 smaller than those of repeat buyers. Credit scores are about 32 points lower while down payments are an average of $42,218 lower.

You can check out our full report here: https://www.lendingtree.com/home/mortgage/first-time-homebuyers-study/

LendingTree's Senior Economist and report author, Jacob Channel, had this to say:

"Even in the face of relatively high rates and steep home prices, first-timers on LendingTree’s platform still received a relatively large share of offers in 2023. While this goes to show that first-timers are still buying, it’s important to note that it doesn’t mean that the housing market was totally overrun by newbies. On the contrary, 2023’s housing market wasn’t very active compared to previous years. This means that first-time buyers weren’t necessarily flooding the market, so much as they just happened to make up a bigger portion of a smaller overall pool of would-be mortgage borrowers."

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Redfin reports new listings dropped for the first time since June and pending sales growth slowed; stagnating mortgage rates and the biggest home-price jump in over a year caused the market to lose momentum

New listings dropped 1.2% month over month on a seasonally adjusted basis, the first decline since June, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. They were up 2.7% from a year earlier, but that marks a deceleration from December’s 4.2% gain.

Active listings (the total number of homes for sale) fell 0.3% from a month earlier on a seasonally adjusted basis—the first decline in six months—and were down 4.4% year over year.

Pending home sales also lost momentum in January, rising 1.1% from a month earlier on a seasonally adjusted basis—a marked slowdown from December’s 5.1% jump. Still, pending sales were at the highest level since September 2022 and rose 8.8% from a year earlier.

Stagnant mortgage rates are the main culprit that took the gas off the housing market pedal last month. They started and ended January at 6.6%—unexciting news after buyers and sellers at the end of last year watched rates drop the most since 2008. Homeowners are hesitant to sell because a majority of them still have mortgage rates below current levels, and selling often means taking on a higher rate.

“A lot of my customers are paying close attention to what the Federal Reserve says. Buyers and sellers came off the sidelines in December when the Fed signaled it would lower interest rates three times in the next year, but now some are getting cold feet because the Fed indicated that rate cuts may come later than expected,” said Hal Bennett, a Redfin Premier real estate agent in Bellevue, WA. “Inflation and geopolitical conflicts are also scaring some buyers. April, at the absolutely earliest, is when I think things could take off.”

Brutally cold temperatures across the country last month, along with rising housing costs, also likely contributed to the slight cooldown in market activity.

Home Prices Posted the Biggest Increase in 16 Months

The median U.S. home sale price climbed 5.2% year over year to $402,343 in January, the biggest jump since September 2022. Prices were little changed from a month earlier (-0.01%). Please note that home price data is not seasonally adjusted, which is why Redfin focuses on year-over-year changes for this metric.

America's enduring shortage of homes for sale is the primary driver of price growth; both new listings and active listings remained far below pre-pandemic levels in January.

January 2024 Highlights: United States

 
 

January 2024

Month-Over-Month
Change

Year-Over-Year
Change

Median sale price

$402,343

0.0%

5.2%

Pending sales, seasonally adjusted

430,809

1.1%

8.8%

Homes sold, seasonally adjusted

392,446

-0.2%

-1.0%

New listings, seasonally adjusted

510,057

-1.2%

2.7%

All homes for sale, seasonally adjusted (active listings)

1,554,413

-0.3%

-4.4%

Months of supply

3.1

0.5

-0.3

Median days on market

49

6

-3

Share of for-sale homes with a price drop

16.9%

2.9 ppts

0.2 ppts

Share of homes sold above final list price

23.9%

-1.7 ppts

2.7 ppts

Average sale-to-final-list-price ratio

98.4%

-0.2 ppts

0.5 ppts

Pending sales that fell out of contract, as % of overall pending sales

14.2%

-1.5 ppts

0.9 ppts

Average 30-year fixed mortgage rate

6.64%

-0.18 ppts

0.37 ppts

Metro-Level Highlights: January 2024

  • Pending sales: In Las Vegas, pending sales rose 43.4% year over year, more than any other metro Redfin analyzed. Next came Stockton, CA (40.9%) and Raleigh, NC (38.5%). Pending sales fell most in Cincinnati (-19.7%), Grand Rapids, MI (-16.2%) and Tulsa, OK (-11.9%).
  • Closed sales: Closed sales rose most in Stockton (27.9%), San Jose, CA (19.9%) and Salt Lake City (18.1%). They fell most in Camden, NJ (-16.5%), Jacksonville, FL (-13.7%) and Buffalo, NY (-11.2%).
  • Prices: Median sale prices rose most from a year earlier in Camden (14.3%), Miami (13.8%) and Knoxville, TN (13.6%). They fell in five metros, with the biggest declines in San Antonio (-4.9%), Austin, TX (-4.4%) and Memphis (-3.9%).
  • New listings: New listings rose most from a year earlier in North Port, FL (31.9%), McAllen, TX (29.6%) and Fort Lauderdale, FL (27.1%). They fell most in Grand Rapids (-21.9%), Lake County, IL (-19.9%) and Kansas City, MO (-16.3%).
  • Overall supply: Active listings increased fastest in Cape Coral, FL (57.9%), North Port (44.9%) and McAllen (24.2%). They decreased fastest in Raleigh (-28.5%), Las Vegas (-24.8%) and New Brunswick, NJ (-24.1%).
  • Competition: In Rochester, NY, 66.2% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Newark, NJ (59.7%) and Buffalo (58.1%). The shares were lowest in West Palm Beach, FL (6.8%), North Port (6.8%) and Cape Coral (7.7%).
  • Speed: In Rochester, 70.5% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Seattle (65.7%) and San Jose (62%). The lowest shares were in Chicago (14.7%), Knoxville (16.9%) and Tucson, AZ (17.4%).

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-january-2024

Posted On Sunday, 18 February 2024 06:25 Written by
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