Interest Rates
Well, you’ve probably heard the big news by now: The average 30-year fixed-rate mortgage hit an all-time low at 3.29% this week with .7% in fees and points. It’s now the lowest it has been in its nearly 50-year history. 
What you’ve also probably heard was that the Federal Reserve cut rates on Tuesday in a knee-jerk reaction to fears of what the fallout from the coronavirus will do to our economy. On Wednesday it looked like we might possibly be on the trend up in the stock market but Thursday ended with the Dow down nearly 1,000 points. It’s been a bit of a rollercoaster ride for stocks and that might continue if more news of new cases in the US keep being reported.
Mortgage Applications Mortgage Applications showed a sharp increase of 15.1% from one week prior. The refinance index increased 26% from one week prior and was 224% higher than the same week one year ago. Market News How does the coronavirus affect new construction? There are two events home builders are preparing for. The first is that there may be supply-chain issues on building materials that may cause holdups in the upcoming months. The second thing they’re bracing for is a rebound. According to the National Association of Home Builders Chief Economist, Robert Dietz, we tend to see an economic rebound following “black swan” events such as natural disasters and health epidemics. We’ll have to see what happens to the supply chain and demand in the upcoming weeks and months to get a clear picture on how home builders will ultimately be affected. This week CoreLogic released their Home Price Insights report with analysis through January 2020 and forecasts from February 2020. It’s designed to give us the heads-up on home price trends. Some key takeaways from the report are:
Local Market News The Case-Shiller Dallas Home Price Index is down 21 basis points to 192.81 for December compared to November 2019. When you look at the numbers year-over-year, you get a modest increase of 2.6%. The areas with the largest year-over-year price gains were Phoenix at 6.5%, Charlotte at 5.3%, and Tampa at 5.2% This index measures the average change in value of all existing single-family housing stock. There’s a two-month lag in publishing the index levels, so that’s why we just now have numbers for December. The Takeaway Based on the news and the conversations I’m having with other real estate folks, we’re not sure how long the low interest rates will offset the economic issues that might linger from the effects of the coronavirus. While we hope that people will take advantage of the low rates, economic uncertainty does tend to have buyers press the pause button on home purchase activity. The mortgage application news isn’t showing that happening yet, so I’ll keep watching that metric closely to see if the momentum begins to shift.
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Interest Rates
For the third week in a row, rates have dropped and the experts over at Freddie Mac say the signals all point to home purchase demand continuing to rise over the next few months. Rates are currently at 3.45% with .7% in fees and points for a thirty-year fixed rate mortgage. The lowest on record was the week ending on November 21, 2012 when interest rates for a 30-year mortgage were at 3.31%. One theory on what’s driving mortgage rates lower is, believe it or not, the coronavirus. How? Well, experts predict the coronavirus will begin to slow economic growth in China. That uncertainty brought down the 10-year treasury yield, which then brought down interest rates. 
Mortgage Applications
Mortgage applications increased from the week before by 5% and they’re up 11% from this time a year ago. Applications are currently at their highest levels since May 2013. In other mortgage news, credit availability decreased in January. It wasn’t by much but the Mortgage Credit Availability Index fell by 2 basis points in January. This means that lending standards are getting stricter. This decline came from the reduction of low credit score, high-LTV programs. Market News The Texas Real Estate Center at Texas A&M University released their Texas Housing Insight Report. The big takeaways from the report are:
The Takeaway The numbers from 2019 show, at least to me, that growth was pretty controlled last year. I’d predict this year builds on that growth a little more since there was a lot of hesitation last year with buyers due to economic uncertainty. Rates appear to be a good driver of getting buyers back in the game for purchasing a home this year.
Interest Rates
Surprise, surprise, mortgage rates have dropped again! We haven’t seen a rate this low in three years. For a thirty-year fixed rate mortgage the average is 3.51% with .7% in fees and points. 
Mortgage Applications
In the latest weekly survey, mortgage applications rose 7.2% from one week earlier. Market News On Thursday, January 30, the U.S. Census Bureau released their Quarterly Residential Vacancies and Homeownership report covering the fourth quarter of 2019. About 88.5% of the housing units were occupied, leaving vacancies at 11.5%. Owner-occupied units made up 57.6% of the total housing units and renter-occupied units made up 30.9%. The homeownership rate is on the rise after a major dip in 2016. In 2005 the homeownership rate was at its highest it has been this decade at 69.1%. The Case-Shiller housing price index for November was released on Tuesday. The index is currently at 212.56, a change of 15 basis points from last month. The Case-Shiller housing price index looks at the value of the housing supply in twenty individual metro areas and compiles those int a merged index. Of those metro areas, the ones with the highest year-over-year gains were Phoenix, Charlotte, and Tampa. Dallas had a year-over-year change of a positive 2.8%. In more local news, Texas is the second most popular state for relocating according to the Texas Realtors’ 2020 Relocation Report. The data tracks numbers from 2018. The metros bringing the highest volume of residents to DFW are Los Angeles-Long Beach-Anaheim, New York-Newark-Jersey City, and Chicago-Naperville-Elgin. DFW had the highest number of incoming residents from out of stats at 200,966. What’s also interesting to note is that we had 462,140 residents move out of state in 2018. Where’d they go? California, Oklahoma, and Colorado mostly. The Takeaway With homeownership on the rise, low interest rates, a positive economic outlook, and an upcoming spring market, my crystal ball tells me that it’s about to get busy for Realtors.
Interest Rates
While interest rates did go up one basis point this week, they’re still holding relatively steady and are at 3.65% with .7% in fees and points for a thirty-year fixed rate mortgage. 
Mortgage Applications
In the latest Mortgage Bankers Association weekly survey, mortgage applications increased 30.2% from one week earlier on a seasonally adjusted basis. It was a strong start to the year for the mortgage industry. In fact, it was 8% higher than the same time a year ago. Refinances were also way up by 43%. National Market News The National Association of Home Builders released the Wells Fargo Housing Market Index yesterday. This index measures builder sentiment of current single-family sales conditions and expectations for the next six months as “good,” “fair,” or “poor.” A number over 50 means more builders view conditions as good. This month’s index is at 75, which is one point lower than last month. However, these last two months are the highest sentiment levels since July 1999. Other metrics from this index are:
What’s fueling this positive wave of the industry? It’s interest rates, the steady rise in single-family construction, a healthy labor market, and the need for additional inventory. Local Market News
There are a few places that ended the year with less than one month of inventory available. The availability is tight in:
The Takeaway For the next year we will keep hearing about inventory shortages and a lack of affordable housing. So if you have a home to sell that’s at a more affordable price, you’ll be in a great position to sell this year. If you like hearing these stats and want more detailed data on your neighborhood, head over to CrestEdgeRealEstate.com/neighborhoods. For any questions or feedback on this podcast, you can contact us on our website. If you’re looking to buy or sell real estate in DFW, let’s talk. Contact us on our website or call us at 214-803-4444.
Interest Rates
Rates are currently the same as last week at 3.73% with .7% in fees and points. According to Freddie Mac, the economy is in a “Sweet Spot.” http://www.freddiemac.com/pmms/ 
Mortgage Applications
Applications decreased 5% from one week earlier. Even though applications were down compared to the week before, they’re 10% higher than the same week one year ago. https://www.mba.org/2019-press-releases/december/mortgage-applications-decrease-in-latest-mba-weekly-survey-x261714 DFW Market News The numbers from November are in. When we compare this year-to-date data on single family homes to last year’s we get the following changes:
The hottest areas are pretty close to where they were last month: #5 – Bedford #4 – Grand Prairie (area 271) #3 – Dallas Southeast #2 – Arlington Central SE #1 – Arlington Central NE The inventory in these areas are six weeks or less. Meaning if no new listings came on the market, it would take about six weeks to sell all homes for sale given the current demand. http://www.mymetrotex.com/wp-content/uploads/2019/12/NTREIS201911.pdf The Takeaway We’re closing on the end of the year and things are steady. Sellers still have the market, especially for anything in an affordable, more average price-point.
Interest Rates
Mortgage rates increased a little from last week due to the overall positive economic sentiment. The economy is growing at a steady pace, fears of an economic downturn have diminished, and the job market is strong. Generally positive economic news leads to a slightly higher interest rates. Rates are up 5 basis points from last week and average 3.73% with .7% in fees and points for a 30-year fixed-rate mortgage.
Mortgage applications
Due to the positive economic outlook, the slight increase in rates did not deter prospective buyers from applying for a home loan. Mortgage applications increased 3.8 percent from a week earlier. In other mortgage news, CoreLogic released their home equity report for the third quarter of this year and it shows that homeowners who owe more on their mortgages that what their homes are worth is down to just 3.7% of all mortgaged properties. To put that in perspective, at the height of the great recession ten years ago, that number was up to 25% of all mortgaged homes.
DFW Market and Economic News
The National Association of Realtors released their Housing 2020 Forecast, making predictions into what the market will look like in 2020. The forecast predicts that on a national level, home price growth will flatten, inventory will remain constrained, mortgage rates will stay under 4.0%, and that preferential treatment will be given to mid-sized markets that have more affordable products. 
Here’s a crazy stat for you:
The largest population cohort in the country is those who were born in 1990. That group will turn 30 this year. Millennials will account for more than half of all mortgages next year. 
Here’s where NAR’s report starts to break down for me.
They predict that sales growth in Dallas will be down 4.9% and the price growth will be down 0.5%. Now I’m not an economist and I don’t have all the data that NAR used to create their predictions. But I know what I see in the field. I’ll start with saying that it is possible we will see fewer homes listed next year as sellers might resist listing their homes since prices aren’t growing at break-neck speed and sellers aren’t making money hand over fist. However, I think buyers would want to take advantage of low interest rates and less aggressive pricing scenarios, bringing up the demand And for prices to go down? I just don’t see how that makes a lot of sense for what’s happening in DFW. If we look at the past as an indication of the future, we keep hearing about businesses choosing to relocate to DFW because of the corporate friendly environment we have with our tax structure and overall cost of living. We also have a good job candidate pool with multiple universities feeding into the local labor market. Just a few weeks ago we learned that Charles Schwab will move its headquarters to DFW. They’re currently building out their campus that holds 1600 employees to hold up to 6000 employees. We have a strong multifamily housing market with an apartment occupancy of 95.5% according to the Dallas FED. Builders aren’t building enough inventory to keep up with the demand. Considering housing options are tightening while more people are coming to the area, I struggle to see why prices wouldn’t increase at all next year and why we’ll sell so fewer homes. Only time will tell whose crystal ball is correct. 
The Takeaway
If you’re a seller looking to sell a moderately-priced home in 2020, you’ll have a good amount of demand for your home. Buyers, if you’re looking for a home that’s above the affordable range, it will be a great time for you. With interest rates projecting to be below 4% and pricing to cool at the higher levels, you might have more buying power in 2020 than you would’ve in 2019.
Interest Rates
Mortgage rates are holding steady with no change from last week. They’re currently at 3.68% with .5% in fees and points for a thirty-year fixed-rate mortgage. 
Last week Freddie Mac’s economic and housing research group released their housing market forecast. They predict the average 30-year fixed-rate mortgage rate will be 3.8% for the rest of this month.
Looking beyond, they expect rates to average 3.8% in 2020 and 2021. For home sales, they expect the number of homes sold to increase each year but they predict the growth of prices will slow over the next two years. They’re forecasting prices to increase 2.9% next year and increase only 2.1% in 2021. 
Prepared by the Economic & Housing Research group © 2019 by Freddie Mac.
Mortgage applications
Mortgage applications are down 9.2% from last week. The Mortgage Banker’s Association Vice President of Economic and Industry Forecasting, Joel Kan said, "The purchase market overall looks healthy as we enter the home stretch of 2019. The seasonally adjusted purchase index was at its highest level since July, as a combination of wage gains, slower home-price appreciation, and slightly easing inventory conditions continue to support increased activity." One last tidbit on mortgages, credit availability increased in November. This means that lending standards are loosening. Investors are becoming more willing to purchase loans with lower credit scores and higher LTV ratios.
DFW Economic News
The Dallas FED released their Economic Indicators report that told us economic expansion has slowed a little and unemployment went up a little, though it’s still near historic lows. The apartment market is strong and is second for demand in the nation behind New York. Occupancy is high, at 95.5% and rents increased this quarter 2.9 percent from last year. If you want a little perspective, rents have increased 65% since 2010. DFW Real Estate Market News Here’s a look at the initial numbers for October sales for all properties listed on the MLS.
The Takeaway All indicators keep pointing that the market is going to stay about where it is for the foreseeable future. If you’re looking to buy or sell real estate in DFW, let’s talk. Contact us on our website or call us at 214-803-4444.
Interest Rates
We saw a slight drop in mortgage rates this week with the average at 3.66% and .6% in fees and points. Considering that residential real estate accounts for one-sixth of the economy, the experts at Freddie Mac’s Economic & Housing Research Group believe the improving market will support economic growth heading into next year. It’s believed that the U.S. and China ongoing trade rollercoaster and protests in Hong Kong pulled the U.S. Treasuries down and mortgage rates followed the path.
Source: http://www.freddiemac.com/pmms/
Mortgage applications
Mortgage applications for new home purchases increased 31.5 percent from this time last year. Builder’s must have had a feel for this news because for the last four months, housing starts and permits have been on the rise. Some speculate this increase in supply coming soon will lead to slower price growth and improve the affordability issue. Time will tell if that’s the case. In contrast to new homes only, mortgage applications overall fell last week by 2.2%. Nation Real Estate News Yesterday the National Association of Realtors released their Existing-home sales report with October data. The Midwest and south saw growth where the northeast and west saw a drop in sales. We bounced back from last month were the four major U.S. regions were split and total existing home sales increased 1.9% from September. Lawrence Yun, NAR’s chief economist, said, “Historically-low interest rates, continuing job expansion, higher weekly earnings and low mortgage rates are undoubtedly contributing to these higher numbers. We will likely continue to see sales climb as long as potential buyers are presented with an adequate supply of inventory.” DFW Market Stats This week we take a look at the hottest areas in DFW. This is a ratio of pending sales as a percent of active listings. The top hottest areas are: 5. Bedford (MLS Area 120) 4. Watauga (MLS Area 128) 3. Grand Prairie (MLS Area 275) 2. Arlington Central SE (MLS Area 82) 1. Grand Prairie (MLS Area 273) These areas also have 6 weeks or less of inventory. Other areas with less than 6 weeks of inventory are:
The Takeaway If you’re a builder trying to make your end-of year sales numbers, now could be a good time for you. It’s not a homerun for selling new construction but you have more buyers looking, which helps. For buyers, rates are still great though inventory is very low in some areas, so you may have to be patient to purchase if you’re not flexible on your criteria. For sellers, the market is still positive though your buyer pool may be getting a little smaller. If you’re looking to buy or sell real estate in DFW, let’s talk. Contact us on our website or call us at 214-803-4444. Our next update will be in two weeks. I’m taking next week off for the Thanksgiving break. I hope you have a good one and I’ll see you on December 6th.
Interest Rates
Interest rates ticked up this week to a current average of 3.75% for a thirty-year fixed-rate mortgage with .6% in fees and points. That’s in increase of 6 basis points from last week. According to Freddie Mac, this increase can be attributed to a decrease in recession fears and an overall more optimistic outlook on the global economy. If there’s a quote from the news to give you the warm fuzzies about real estate in 2020, it would be from Freddie Mac’s Economic & Housing Research group: “Given the important role residential real estate plays in the economy, the steady improvement of the housing market is a reassuring sign that the economy is on solid ground heading into next year.” Source: Click Here 
Mortgage News
The latest mortgage application survey shows that mortgage applications have increased to their highest level in over a month. A trend that is usually on the downswing in the winter months is on the rise. The MBA credits positive consumer sentiment and increased optimism around the U.S. and China dispute as factors for this current wave of buyer confidence. The Mortgage Bankers Association issued a press release yesterday stating mortgage delinquencies have fallen to their lowest level in nearly 25 years. They point to a healthy labor market and strong economic growth as factors in reducing the number of mortgage delinquencies. News from the Federal Reserve On Wednesday the Federal Reserve Bank of New York delivered a press release stating the total household debt has increased by .7% to $13.95 trillion for the third quarter of this year. Much of this increase is from near-record high auto loan originations and significant increases in mortgage originations. This week we heard from Jerome Powell, Chair of the Federal Reserve, in a testimony to the Joint Economic Committee. Here are some of the interesting points from his testimony:
DFW Market Stats This week we’re taking a look at the North Texas Real Estate Information System MLS Area Housing Activity Report from the Real Estate Center at Texas A&M University. Usually our stats are focused on all types of properties listed in the MLS. Today we’re going to look at some specific housing types and break up the data a little. The number of single-family sales are up 3% from a year ago. The average price is up two percent from a year ago to an average of $317,518. The average time on market for a single family home is up 15% from a year ago to 51 days. The largest price class for single family homes sold year-to-date is from $200,000 to $299,999. That price class has 35% of this year’s sales. An interesting statistic, There were 151 sales for single family homes over $1 million in October. That’s an increase of 1.7% from last year. Year-to-date there have been 1,528 single-family homes sold over $1 million, an increase of 2% from last year. But if you’re a seller in this high-end market, don’t get too excited about these stats. There are currently 9.3 months of inventory on the market for homes over $1 million. This means if nothing new came on the market in this price range, it would take over 9 months for the current supply to sell given the current demand. That makes the $1million+ price point a buyer’s market for negotiations. If you’re considering renting, five percent more properties were leased in October of this year than last year. The pricing has gone up to 3%. The current average rent for North Texas is $1,838. The Takeaway We can see from the numbers that the market is still positive for sellers unless you’re in the over $1 million market. The general the consensus of the immediate economic future is positive. This will likely give buyers the confidence they need to get into the market if they haven’t already jumped in. If you like hearing these stats and want more detailed data on your neighborhood, head over to CrestEdgeRealEstate.com/neighborhoods. If you’re looking to buy or sell real estate in DFW, let’s talk.
Interest Rates
Interest rates dropped 9 basis points to an average of 3.69% with .5% in fees and points. 
Source: http://www.freddiemac.com/pmms/
Mortgage Applications
The Mortgage Bankers Association is forecasting purchase originations will increase 1.6 percent in 2020. Their Chief Economist, Mike Fratantoni, believes we will see one more interest rate cut before the end of the year. He also predicts geopolitical uncertainty and a continued slowdown in the global economy will continue through next year and slow U.S. economic growth. This will keep interest rates low into next year, encouraging buyers to purchase. Source: MBA Press Release In The News Economic uncertainty is one of the factors that plays into the strength of the housing market. When people are unsure of what will happen in the economy, they pump the brakes on home purchases. The tariff dispute with China has created a lot of economic tension for quite a while. Some speculate this has kept home buyers at bay. However, news released yesterday said that the U.S. and Chinese negotiators have agreed in principle to roll back tariffs in simultaneous stages if their trade talks advance. If the tariff dispute is coming to an amicable conclusion, it’s possible the economy will strengthen and get some buyers back into the purchasing pool. Last week Freddie Mac released their Forecast with the heading, “Housing Market Remains Strong While Economic Slowdown Looms” Freddie Mac’s Chief Economist, Sam Khater said, “The housing market remains on solid ground with housing starts, building permits, existing home sales, and new home sales all outperforming the broader economy.” The forecast predicts housing prices to increase 2.8 percent in 2020. The latest Case-Shiller U.S. National Home Price Index was released last week and increased 21 basis points to a level of 212.06. The Dallas Home Price Index increased .04% to an index level of 192.63. For the last twelve months, Dallas has seen an increase of 2.77% in the total value of existing single-family housing supply. 
Source: https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-us-national-home-price-nsa-index
Source: https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-us-national-home-price-nsa-index
DFW October Market Stats
The average sales price is up 5.7% from October of last year to $315,673. 
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
The average price per square foot is $138, an increase of 4.5% from last year.
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
The average days on market has increased to 52 days on the market. It has been on the rise since June of this year when homes averaged 45 days on the market.
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
Sellers have to negotiate an average of 4.6% off their asking price to get to closing. On a $300,000, that would mean a reduction of $13,800 from the list price.
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
There are 3.3 months of inventory on the market. Still well below what is considered a balanced market of 6 months.
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
The total number of homes for sale in the entire MLS is at 31,865 homes. That number has been on the decline since June. Traditionally inventory does decrease in the fall and winter months, so I expect this number to keep going down.
All data from NTREIS. Data deemed reliable, but not guaranteed. NTREIS Trends © 2019 ShowingTime.
The Takeaway
If you’ve listened to the podcast for a few weeks, you’re probably starting to see a pattern on this takeaway: we’re still in a seller’s market. Projections for next year are all looking relatively positive. No boom, no bust, just steady. If you like hearing these stats and want more detailed data on your neighborhood, head over to CrestEdgeRealEstate.com/neighborhoods. If you’re looking to buy or sell real estate in DFW, let’s talk. Contact us |
AuthorJennifer Shannon is a Texas real estate agent and broker, licensed since 2006. Archives
March 2020
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