Weekly Housing & Real Estate Market Thread - Returning to a Balanced Market - Can Mortgage Bonds Hold This Floor After Deep Fall - Property Taxes Out
- By mortgagehorn
- Inside the 40 Acres
- 0 Replies
Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
A Balanced Real Estate Market -
I know the last few weeks have been brutal in the interest rate markets. On the bright side it seems that home sales and inventories, at least in the Houston Area are both increasing simultaneously. That would indicate that we may finally be returning to a "balanced market" and that's a good thing. Let's look at the numbers and analysis.
Data from Houston Association of Realtors -
There are starting to be some indications that buyers are starting to return to the market. In the latest release by HAR, pending sales are up 5.8% compared to same time period last year. Closings posted a 4.7% increase when compared to last year and showings increased 5.7%.
Not huge jumps but we have been seeing this gradual uptick for several weeks now. The good news is that new listings increased 14.6% so the number of choices available to buyers seems to be also increasing.
Further signs of a balancing out in the marketplace. A balanced market increases activity on both sides. Sellers sell when they think they can get their home sold and buyers buy when they can find a home that suits their needs.
Here is some data for the Austin Area from Austin Board of Realtors -
As of September 2024, the median sales price for the Austin metro as a whole was $425,000, down 6.6% year-over-year. As of September 2024, homes in the Austin metro are on the market for an average of 79 days. As of September 2024, the Austin metro as a whole had 5.9 months of housing inventory.
The decrease in values will help sales. Also the other numbers are closer to historical averages that indicate a balanced market in the Austin Area.
In my opinion it is better to have a lower rate of appreciation and a balanced market. That is when the market functions best versus having either a "Buyer's Market" or a "Seller's Market".
Historical Trend of the Real Estate Market After an Election -
The housing market can experience some fluctuations after a presidential election. Historically, home sales tend to slow down temporarily as potential buyers and sellers may adopt a "wait and see" approach due to the uncertainty surrounding the new administration.
In the year following an election, home sales typically rebound, and the market stabilizes. Obviously the impact of the election on the housing market can also depend on the policies and economic plans proposed by the new administration.
Not going to get into policy discussions in this thread. I just wanted to point out the above for those that may be buying or selling a home over the next few months.
I did find this interesting that Vanguard has real estate stocks/REITS performing better than growth stocks over the next ten years. Not what I would have expected unless they are expecting real estate values to increase, possibly due to inflation.
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Will There Be a Commercial Real Estate Crisis?
Not going to go to deep into this question as I did a thread on it that went 4+ pages. There were lots of great responses from some very savvy posters. There seemed to be a consensus that there is a problem - the argument was more over how large of a problem will it be for the commercial real estate market, lending market, and the overall economy.
At this point it is still TBD but as this post shows it is having some effect.
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The Commercial Real Estate Crisis $950 Billion in mortgages maturing in 2024 (or extending and pretending).
"..Nearly a dozen mid-sized and regional U.S. banks reported higher non-performing loans (NPLs) — debt where borrowers missed scheduled payments — in their CRE portfolios in the third quarter compared with a year earlier, a Reuters analysis of earnings reports showed.
A looming "maturity wall" could complicate matters further. When loans mature, borrowers must either refinance or repay the remaining balance in full.
Failure to do so could lead to defaults and strain banks' balance sheets. Roughly $950 billion of CRE mortgages are expected to mature in 2024, of which 10% are tied to office properties, according to estimates from S&P Global Market Intelligence..."
Full Article Here:
https://www.reuters.com/markets/us/...-us-regional-banks-cre-portfolios-2024-10-29/
Can Mortgage-Backed Securities Hold On This Floor of Support?
Mortgage Bonds have fallen a lot over the last month. Since their price is inversely proportional to rates, that means mortgage rates have moved up by over a full point.
As you can see on the chart below - I drew a red-line showing the fall in prices and the corresponding increase in rates. The last two days the market has touched a floor and bounced off of it. Hopefully they rebound off of it leading to lower rates in the short-term. Otherwise, if it breaks through that floor rates could go substantially higher.
On the bright side rates are still about a point lower than where we were a year ago. Here are the average rates as of today -
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Comparatively here is where I am on rates today:
30 Year Conventional - High 6's
15 Year Conventional - Mid to High 5's
30 Year Jumbo - Mid 6's
30 Year FHA - Low 6's
30 Year VA - Very Low 6's
Friendly Reminder -
As of today Property Taxes are due - if you have not paid them and are refinancing they will be due at closing.
Odd and Ends
Bye week and like the Horns hopefully the "Mortgage Market" heals up!
Since we're not playing the next best thing would be for South Carolina "Game Cock" the Aggies!
As always happy to answer questions ITT or DM me.
May your children have a Fun/Safe/Happy Halloween!
And on that note - Happy Birthday to my 97 year young dad who still drives, has a 89 year young girlfriend, and loves to watch his Texas Longhorns!
Last Year After the BYU game at DKR to celebrate #96.
Hook 'Em!
God Bless,
MH
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
A Balanced Real Estate Market -
I know the last few weeks have been brutal in the interest rate markets. On the bright side it seems that home sales and inventories, at least in the Houston Area are both increasing simultaneously. That would indicate that we may finally be returning to a "balanced market" and that's a good thing. Let's look at the numbers and analysis.
Data from Houston Association of Realtors -
There are starting to be some indications that buyers are starting to return to the market. In the latest release by HAR, pending sales are up 5.8% compared to same time period last year. Closings posted a 4.7% increase when compared to last year and showings increased 5.7%.
Not huge jumps but we have been seeing this gradual uptick for several weeks now. The good news is that new listings increased 14.6% so the number of choices available to buyers seems to be also increasing.
Further signs of a balancing out in the marketplace. A balanced market increases activity on both sides. Sellers sell when they think they can get their home sold and buyers buy when they can find a home that suits their needs.
Here is some data for the Austin Area from Austin Board of Realtors -
As of September 2024, the median sales price for the Austin metro as a whole was $425,000, down 6.6% year-over-year. As of September 2024, homes in the Austin metro are on the market for an average of 79 days. As of September 2024, the Austin metro as a whole had 5.9 months of housing inventory.
The decrease in values will help sales. Also the other numbers are closer to historical averages that indicate a balanced market in the Austin Area.
In my opinion it is better to have a lower rate of appreciation and a balanced market. That is when the market functions best versus having either a "Buyer's Market" or a "Seller's Market".
Historical Trend of the Real Estate Market After an Election -
The housing market can experience some fluctuations after a presidential election. Historically, home sales tend to slow down temporarily as potential buyers and sellers may adopt a "wait and see" approach due to the uncertainty surrounding the new administration.
In the year following an election, home sales typically rebound, and the market stabilizes. Obviously the impact of the election on the housing market can also depend on the policies and economic plans proposed by the new administration.
Not going to get into policy discussions in this thread. I just wanted to point out the above for those that may be buying or selling a home over the next few months.
I did find this interesting that Vanguard has real estate stocks/REITS performing better than growth stocks over the next ten years. Not what I would have expected unless they are expecting real estate values to increase, possibly due to inflation.
Login to view embedded media
Will There Be a Commercial Real Estate Crisis?
Not going to go to deep into this question as I did a thread on it that went 4+ pages. There were lots of great responses from some very savvy posters. There seemed to be a consensus that there is a problem - the argument was more over how large of a problem will it be for the commercial real estate market, lending market, and the overall economy.
At this point it is still TBD but as this post shows it is having some effect.
Login to view embedded media
The Commercial Real Estate Crisis $950 Billion in mortgages maturing in 2024 (or extending and pretending).
"..Nearly a dozen mid-sized and regional U.S. banks reported higher non-performing loans (NPLs) — debt where borrowers missed scheduled payments — in their CRE portfolios in the third quarter compared with a year earlier, a Reuters analysis of earnings reports showed.
A looming "maturity wall" could complicate matters further. When loans mature, borrowers must either refinance or repay the remaining balance in full.
Failure to do so could lead to defaults and strain banks' balance sheets. Roughly $950 billion of CRE mortgages are expected to mature in 2024, of which 10% are tied to office properties, according to estimates from S&P Global Market Intelligence..."
Full Article Here:
https://www.reuters.com/markets/us/...-us-regional-banks-cre-portfolios-2024-10-29/
Can Mortgage-Backed Securities Hold On This Floor of Support?
Mortgage Bonds have fallen a lot over the last month. Since their price is inversely proportional to rates, that means mortgage rates have moved up by over a full point.
As you can see on the chart below - I drew a red-line showing the fall in prices and the corresponding increase in rates. The last two days the market has touched a floor and bounced off of it. Hopefully they rebound off of it leading to lower rates in the short-term. Otherwise, if it breaks through that floor rates could go substantially higher.
On the bright side rates are still about a point lower than where we were a year ago. Here are the average rates as of today -
Login to view embedded media
Comparatively here is where I am on rates today:
30 Year Conventional - High 6's
15 Year Conventional - Mid to High 5's
30 Year Jumbo - Mid 6's
30 Year FHA - Low 6's
30 Year VA - Very Low 6's
Friendly Reminder -
As of today Property Taxes are due - if you have not paid them and are refinancing they will be due at closing.
Odd and Ends
Bye week and like the Horns hopefully the "Mortgage Market" heals up!
Since we're not playing the next best thing would be for South Carolina "Game Cock" the Aggies!
As always happy to answer questions ITT or DM me.
May your children have a Fun/Safe/Happy Halloween!
And on that note - Happy Birthday to my 97 year young dad who still drives, has a 89 year young girlfriend, and loves to watch his Texas Longhorns!
Last Year After the BYU game at DKR to celebrate #96.
Hook 'Em!
God Bless,
MH
