You may have heard the term PITI regarding the breakdown of a total monthly mortgage payment. Lenders look at an entire PITI payment, not just principal and interest when determining how much a buyer may qualify for.

It's fact; housing markets are inherently local, with seasonal pricing and sales volume patterns that repeat every year, especially in colder-weather markets. That pattern is evident when we look at single-family home sales volumes for the five years prior to 2020

Inflation, home prices, and rents are all on the rise, while Initial Jobless Claims hit their lowest level since 1969.

There were some mixed messages regarding November job creations while home prices continued to rise in October. Plus, the new Omicron COVID variant and Fed chatter regarding inflation led to volatility in the markets.

The Federal Housing Agency (FHA) has just increased the amount of money that can be borrowed through its mortgage programs by more than $64k in most areas. In high-cost locations, the increase is even greater. New limits will take effect in 2022.

The Federal Housing Finance Agency (FHFA) just raised their conforming loan limit for 2022 by 18% to a maximum amount of $647,200 with high-cost areas being $970,800.

A full serving of news on inflation, housing, and the economy was reported ahead of Thanksgiving, with plenty of headlines for the markets to feast on.

The high demand for homes around the country has helped homebuilders remain confident, despite ongoing supply, labor, and lot shortages. Meanwhile, rents continue to rise.

Fall has ushered in cooler temperatures and hotter inflation, which is having an impact on households around the country and confidence among small business owners.

Zillow mentioned this week they will be exiting buying and flips of homes, (started in December 2019) eliminating 25% of its workforce.

The first week of November was filled with headlines on job creations, home price appreciation, and the Fed’s taper announcement. Economists were anticipating 450,000 job creations in October, but job growth beat expectations last month per the Bureau of Labor Statistics, which reported 531,000 new jobs.

Sales of new homes surged in September, rising 14% from August at an 800,000 annualized pace. This was stronger than expectations and the highest reading since March. However, on an annual basis, sales were 18% lower when compared to September of last year – but there is more to this story as noted below. Meanwhile, Pending Home Sales, which measure signed contracts on existing homes, fell 2.3% in September after an 8% gain in August.

Demand for homes and builder confidence remains strong, despite low inventory and ongoing supply chain issues. Initial Jobless Claims hit another important milestone, while the Fed revised an important forecast. Builder confidence rose at the highest monthly pace since last November, per the National Association of Home Builders Housing Market Index.

After the markets were closed Monday for Columbus Day, inflation data, employment news and the Fed minutes made plenty of headlines. Consumer inflation rose by 0.4% in September, in line with expectations, per the Consumer Price Index (CPI). The year-over-year reading increased from 5.3% to 5.4%. Core CPI, which strips out volatile food and energy prices, rose by 0.2%, which was in line with expectations. On a year-over-year basis, Core CPI remained at 4%.

The last week of September was jam-packed with news on housing, inflation, and jobless claims.

The Case-Shiller Home Price Index showed that prices rose 1.6% from June to July and they were up a record 20% annually. The Federal Housing Finance Agency (FHFA), which measures home price appreciation on single-family homes with conforming loan amounts, also showed strong appreciation. Home prices rose 1.4% from June to July and 19% year over year.

The Federal Reserve Board (the Fed) is the central banking system of the U.S. The Fed supports the U.S. economy with monetary policy. They recently met to discuss and comment on policy.

The Fed indicated it could start raising rates in 2022. These are charges for overnight loans from bank to bank and will often indirectly impact mortgage rates.

Housing data and the Fed meeting highlighted a jam-packed week of news for the markets to digest.

Sales of existing homes fell 2% from July to August, reaching an annual pace of 5.88 million units. Much-needed inventory also ticked lower, unfortunately, falling 1.5% from July to August and 13% year over year.

However, sales of new homes beat expectations, rising 1.5% from July to August. There were also positive revisions to July’s data, which means the gain is really like a 4.5% rise month over month.

August brought disappointing news from the labor sector, as job growth was much lower than expected. Meanwhile, home price appreciation continues at a record-setting pace.

Just 235,000 jobs were created in August, the Bureau of Labor Statistics (BLS) reported, which was much lower than expectations of 750,000 new jobs. However, positive revisions to the data for June and July adding 134,000 new jobs in those months combined took some of the stings out of the disappointing news. The Unemployment Rate fell from 5.4% to 5.2% but an increase may be ahead, as explained below.

A summary and detailed description of this month’s real estate and mortgage trends for August 2021.

A detailed description of real estate and mortgage trends for August 2021.