Numbers Count: Weekly mortgage data highlights

Wendy Cutrufelli
Posted by Wendy Cutrufelli
Mortgage Banking

Numbers count. They matter to bankers and to prospective homebuyers, sellers, and real estate professionals. Here’s my take on the key numbers on the housing market this week. For Sale sign in front of house

The numbers: Sellers’ sentiment

Forty-three percent of Americans surveyed say it is a good time to sell a house, according to Fannie Mae’s July Housing Survey released Aug. 7. The percent optimistic about selling tied the survey high reached in May. The share of consumers who say their home has increased in value since they bought it rose to an all-time high for the survey begun in 2010, which suggests a long-term positive trend for household balance sheets, Fannie Mae said in the release.

What counts: I’ve heard stories of homeowners holding off putting their homes on the market in hopes of capturing future appreciation. Home price appreciation has slowed this year in many markets, so owners who have held out for big gains may be ready to put their homes on the market now. This may mean increased inventory of existing homes, which is up from last year but still a bit below historical averages. Added inventory helps improve the balance between buyers and sellers, and should temper the pace of multiple offers on homes in certain markets.

The numbers: Affordability for now

In a positive sign of housing affordability, a report released Aug. 7 by real estate data provider RealtyTrac finds that eight out of 10 Americans live in areas where the percentage of income needed to purchase a median-priced home is at or below its long-term average. On the flip side, 19% of the population lives in counties where the percentage of income needed to buy a median-priced home is above the 14-year average, according to the second quarter data from RealtyTrac. Among the 1,194 counties in the second-quarter report, the average percentage of median income needed to buy a median-priced home was 19%.

What counts: If you live in some of the “inherently unaffordable housing markets” identified by RealtyTrac, such as Manhattan or the California counties of San Francisco, Marin, Santa Cruz, San Luis Obispo or Los Angeles, the thought of needing just 19% of the median income to buy a home probably seems like a dream. But setting aside the high-cost markets, this report is positive: 81% of Americans are in markets that would be considered affordable by historical standards. That should be reassuring for potential buyers that a repeat of the 2006-07 housing price bubble is not in the making and that prices in the market are not excessive. Of course, the affordability equation is benefiting from relatively low interest rates. RealtyTrac points out that if interest rates rise 1%, 630 counties, representing 46% of total population, would exceed their historical averages for income-to-price affordability percentages.

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