The Rise In American Homeownership Tenure
Homeowners are remaining in their homes longer than ever before according to a report from First American This Week in Real Estate and mortgage applications to purchase a home jumped 17% to start the new year. Below are a few highlights from the second week of January that influence our business:
Plunge in Rates Sparks 23.5% Spike in Mortgage After Unusually Weak Holidays
The combination of lower mortgage rates and an unusually slow end to 2018 caused mortgage applications to surge to start this year. Overall volume jumped 23.5 percent last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. A sharp drop in interest rates to the lowest level since April sparked a mini-boom in refinancing. Those applications surged 35 percent week-to-week to their highest level since July. Volume was still lower by nearly 22 percent than a year ago, when the average rate on the 30-year fixed mortgage was 51 basis points lower. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.74 percent, from 4.84 percent, with points increasing to 0.47 from 0.42 (including the origination fee) for loans with a 20 percent down payment. The rate is 22 basis points lower than four weeks ago. Mortgage applications to purchase a home also jumped 17 percent last week but were just 4 percent higher than a year ago.
Home Price Growth Slows in Most States
Home prices have appreciated consistently since the housing market began its recovery, but now they appear to be slowing down after a six-year run. The latest data from Black Knight reveals that home price growth has slowed in 33 states and in 71 of the nation’s 100 largest markets. Annual gains decelerated by 1.3% from February to October, according to Black Knight’s latest Mortgage Monitor report. October saw growth flatten to just 5.4%, down from February’s four-year high of 6.7%. The report notes that home price appreciation from July through October was the most tepid four-month stretch in nearly four years. And, while the slowdown is apparent across much of the nation, the west saw the most deceleration, with California the standout as price growth fell below the national average for the first time since early 2012.
American Homeownership Tenure is Climbing
Americans are remaining in their homes longer than ever before, consequently tightening the lid on housing supply. First American data indicates that homeownership tenure has risen 10% just from 2017 and has significantly climbed since the market crashed in 2008. “Tenure jumped to seven years during the aftermath of the crash between 2008 and 2016, and the most recent data from December 2018 shows that the median length of time someone lives in their home has increased 10% compared with a year ago,” First American Chief Economist Mark Fleming said.