Mortgage Watch | November 19, 2018

Housing market showing signs of stability at last

It’s finally getting normal around here. According to a recent analysis by Realtor.com’s Andrea Riquier, there’s fresh evidence that the housing market is gaining some stability after some crazy years of multiple offers that resulted in inflated pricing in many markets.

You can’t argue with the Census Bureau, which says the national homeownership rate was 64.4% in the third quarter, a half-percentage point higher than a year ago. That may not sound like much, but if you study the numbers, it’s a big deal.

“After touching an all-time high of 69.1% in 2004 as the housing bubble inflated, the homeownership rate bottomed out at 62.9% in 2016 as waves of Americans lost their homes or sold under duress,” says Riquier. “At the same time, many Americans who would ordinarily become buyers were locked out of the market by stringent lending rules, a lack of affordable inventory and a challenging economic backdrop.”

Over the past 12 months, 1.77 million more Americans became owners, while the number of renters declined by about 100,000, adds Riquier in a MarketWatch report. “Even better, the biggest jumps in ownership were among younger people. For those under 35, 36.5% were owners in the second quarter, compared to 35.3% a year ago. Americans age 35 to 44 saw a correspondingly hefty jump, to 60% from 58.8% in 2017.”

This all points to a potential moderation in home prices going into 2019, which some analysts believe came from would-be buyers pushing back against hefty price gains, helped many of them finally become owners.

While there’s a lot of speculation about what made this happen, the meager recovery to this point puts the homeownership rate only back to 1995 levels, well before the run-up to the 2008 bubble, suggesting it may be possible for many more Americans to become owners providing market conditions ease further. The vacancy rate for owners was just 1.5% for the second month in a row, tighter than the 1.6% it averaged throughout 2017.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways so far today. Last week the MBS market improved by +65bps. This was enough to move rates lower last week. We saw high rate volatility at the end of the week.

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.