Beginning in January 2014, the trajectory of median new home sale prices in the U.S. with respect to median household income began to follow a new trend, with typical new home sale prices increasing at an average pace of nearly $11 for every $1 increase in typical household incomes.

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The good news is that rate of increase is less than half that observed during the primary inflation phases of the first and second housing bubbles in the U.S. The bad news is that rate of increase with respect to household incomes is still 2.7-3.3 greater than those recorded during periods of stable growth in the periods preceding the inflation phases of real estate bubbles.

As we noted in our previous installment, the current pace of growth is consistent with that observed in the latter portion of the inflation of the first housing bubble.

Now, it’s important to note that this situation doesn’t mean that a new crash in housing prices is imminent, or even likely. Now that real estate investors have established a shortage of affordably priced homes in the U.S. market, U.S. homebuilders are now better able to exploit the situation by building more affordably priced homes, which several have begun to do in recent months.

Note to America’s builders: less-expensive homes are starting to move.

Purchases of new homes climbed 7.8 percent from the previous month to a seasonally adjusted 539,000 annualized pace in February, a seven-year high, according to the latest U.S. government report. Perhaps the best news for the housing industry as a whole came in the breakdown of sales, by price.

Americans signed contracts to purchase 17,000 new houses in the $200,000-to-$299,999 price range last month, the most since March 2008. That amounts to 39 percent of the 44,000 properties sold in February (unadjusted and not annualized). Another 8,000 homes-the most in nine months-sold in the range of $150,000 to $199,999.

The shifting sales mix of new homes toward lower-priced homes is prompting an increase in sales volumes, which is a desirable outcome for the current market. Since November 2014, when the median new home sale price in the U.S. peaked at $302,700, the median sale prices of new homes has fallen in each month since, and in February 2015, stands at a preliminary value of $275,500. This figure will be revised several times over the next several months.

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http://seekingalpha.com/article/3054396-the-current-trend-for-u-s-median-new-home-sale-prices?ifp=0

New research by loanDepot LLC indicates the number of parents who expect to help their Millennial-age children purchase a home in the future will increase by 31 percent compared to the past five years, from 13 to 17 percent. Half (50%) of the parents who will help their children buy a home say they’ll contribute toward down payments, while 20 percent will cover closing costs and 20 percent will cosign the loan.

In the future, about two-thirds of parents (67%) say they they’ll use savings to help their children buy a home, compared to 72 percent in the past. The number of parents who plan to use cash from a refinance or take out a personal loan to help their children buy a home is expect to double. In the past, just 4 percent of parents refinanced their homes and 3 percent used personal loans. In the future, those numbers are expected to increase to 8 percent for parents who will refinance and 8 percent for parents who will take out a personal loan.

“Support from parents is playing a significant role in the housing recovery, and this new research indicates the trend will increase,” said Dave Norris, president and chief operations officer at loanDepot LLC. “First time home buyers comprise 28 percent of the today’s home buying market[1], an almost all-time low. Through the survey, 75 percent of Millennial-age home-buyers who received financial support from their parents said that assistance made it possible for them to buy a home. Without that financial support, it’s likely the pool of Millennial first-time home buyers would be even smaller than today.”

AGREE TO DISAGREE

The loanDepot research surfaced opposing views between parents and Millennial-aged buyers about whether or not the parent’s financial support was or will be a gift, loan, inheritance or something else altogether. While most parents (68%) view the financial support as a gift, only 29 percent of Millennial-aged children agreed. More Millennials (36%) view their parent’s financial support as a loan to be repaid than as a gift (29%).

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http://www.realestateeconomywatch.com/2015/03/bank-of-mom-and-dad-puts-kids-in-houses/

After weeks of steady declines and levels well below originations the same time last year, mortgage applications jumped a surprising 10.3% from one week earlier, according to data for the week ending June 6 from the Mortgage Bankers Association.

The previous week’s results included an adjustment for the Memorial Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 10.3% on a seasonally adjusted basis from one week earlier.

The Refinance Index increased 11% from the previous week. The seasonally adjusted Purchase Index increased 9% from one week earlier. The unadjusted Purchase Index increased 19% compared with the previous week and was 13% lower than the same week one year ago.

“The jump in applications shows folks are taking notice of rates near six-month lows,” said Quicken Loans vice president Bill Banfield. “The jump in purchase applications is especially good to see, as homeowners may finally be getting comfortable putting their home on the market with the level of inventory they see around them.”

The refinance share of mortgage activity increased to 54% of total applications from 53% the previous week. The adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.34% from 4.26%, with points increasing to 0.16 from 0.13 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate increased from last week.

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http://www.housingwire.com/articles/30280-mortgage-applications-unexpectedly-jump-10-for-week