According to Fannie Mae This Week in Real Estate the median home sales price recently realized its largest year-over-year increase on record and the mortgage market experienced an increase of 21 percent in purchase activity last week compared to a year ago. Below are a few newsworthy events from the first full week of October that influence our business:
Home Prices Rose by Record Numbers Last Week. Home sales are up, and so are the prices. Median home sale prices have made the largest increase on record, jumping 15% year over year for the week ending October 4. As of last week, the median home sale price in America was $320,625, compared to $279,090 a year ago. Fannie Mae SVP and Chief Economist Doug Duncan said to expect home prices to keep on rising. Also setting records this month is the average sale-to-list price ratio, which measures how close homes are selling to their asking prices. That index rose to 99.4%, 1.2 percentage points higher than a year earlier.
Mortgage Applications Uptick in Early October. According to the Mortgage Bankers Association’s latest Weekly Mortgage Applications Survey for the week ending October 2, 2020, U.S. mortgage applications increased 4.6 percent from one week earlier. The Refinance Index increased 8 percent from the previous week and was 50 percent higher than the same week one year ago. “Mortgage rates declined across the board last week – with most falling to record lows – and borrowers responded. The refinance index hit its highest level since mid-August,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Continuing the trend seen in recent months, the purchase market is growing at a strong clip, with activity last week up 21 percent from a year ago. The average loan size increased again to a new record at $371,500, as activity in the higher loan size categories continues to lead growth.”
Lot Size Hits New Record Low. For the first time since the Census Bureau started tracking lot sizes for new single-family detached homes, the median lot size for homes sold in 2019 dropped to 8,177 square feet, or 0.188 of an acre. This represents a solid drop of 390 square feet since 2018 and a new record low. The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres.