Existing home sales continued to increase from September through October, and the Mortgage Bankers Association raised its origination forecast for the second half of this year.
Monday the National Association of Real Estate Agents Existing homes sold at a seasonally adjusted annual rate of 6.34 million in October, up 0.8% from September and down 5.8% from October 2020. From August to September, sales increased by 7%.
“Apart from the surge last winter which made up for missed sales after the arrival of COVID-19, current sales are at their highest level since 2006,” NAFCU chief economist said on Tuesday. , Curt Long. “According to Freddie Mac, the average rate on a 30-year mortgage increased 17 basis points in October, but it did not have a significant impact on sales.”
Joel Kan, deputy vice president of economic and industrial forecasting at MBA, said the report showed home sales were holding steady even as demand for homes continued to be held back by insufficient supply.
âNonetheless, it was good news that home sales rose for the second month in a row and at the fastest pace of sales since January 2021,â Kan said. “Similar to MBA’s recent weekly data on mortgage loan applications, home sales are still below the strong pace of last year, but have recently shown renewed strength.”
Monday, MBA released its monthly forecast review, which did not change expectations for mortgage origination until the third and fourth quarters. The refinancing arrangements for the third quarter of 2021 have been revised upwards by 2% and the fourth quarter has been increased by 12%. The purchase arrangements expected in the third quarter were raised by 6%.
The MBA shows that purchase fixtures fell 4% between the second and third quarters and 12% in the fourth quarter. For the year, the MBA predicts that purchasing fixtures will increase 9% to $ 1.61 trillion, followed by 7% gains in 2022 and 2023.
Refinancing arrangements fell 13% between the second and third quarters, then 13% in the fourth quarter. For the year, MBA predicts refinancing will drop 12 percent to $ 2.32 trillion. He predicts that refinancing will drop 63% to $ 860 billion in 2022 and fall another 21% in 2023.
Total productions fell 9% between the second and third quarters and 13% in the fourth quarter. With purchases becoming a larger part of the mix, total creations are expected to drop 4% to $ 3.93 trillion in 2021, and again 34% in 2022 and 4% in 2023.
NAR reported that half of all existing homes sold for at least $ 353,900 in October, up 13.1% from the median price a year earlier.
âHome sales remain resilient, despite low inventories and growing affordability concerns,â NAR chief economist Lawrence Yun said. âInflationary pressures, such as rapidly rising rents and rising consumer prices, may cause some potential buyers to seek the protection of a fixed, consistent mortgage payment. “
Based on current sales, there was 2.4 months of supply at the end of October, roughly the same as the month before. Long said analysts consider six months of inventory to be a rough balance between supply and demand.
âIt will take a sharp reduction in demand to have an impact on sales levels and the pace of price appreciation,â Long said. âInventory levels remained near all-time lows in October, but the fact that rental prices are also rising rapidly is reducing the effects of rising home prices.
âThere are some promising developments on the construction front, but it will take time to impact the resale market,â Long said. “The NAFCU expects housing to continue on its current trajectory for the foreseeable future.”