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Homebuyers Spend Fewer Days Searching for a Home

Homebuyers Spend Fewer Days Searching for a Home
According to a new report by RedFin, Americans are speeding up the time to search and tour homes before making a decision and putting in an offer.

With more homes on the market, prices growing at a slower rate and even falling in some markets, and less competition from other buyers, finding a home is a lot less stressful this year than it has been in recent years. When a buyer finds the home they want to make an offer on there’s now a greater chance that their offer will be the only one and that the seller will accept it. This has led to the shortest median home search length for buyers during the winter months in at least six years.

As the market is becoming more tenable for buyers, it’s becoming less favorable for sellers, who are waiting longer to secure a buyer this year. Nationwide, homes that sold in February spent a median 59 days on the market before going under contract, up two days from a year earlier, and following three consecutive years of acceleration.

Buyers this year are also having to see fewer homes in person and write fewer offers before successfully landing a home. Nationally, buyers toured an average of about 10 homes this winter before closing on a home, and made an average of 1.6 offers, compared to touring about 11 homes and making 1.8 offers a year ago.

Buyers’ Time on Market, 3-Month Median as of February

Metro AreaMedian Length of Buyer Home Search in Days (2018)Median Length of Buyer Home Search in Days (2019)Median Buyer Home Search Length (Change)
Atlanta, GA69745
Austin, TX7368-5
Baltimore, MD7168-3
Boston, MA84873
Chicago, IL8483-1
Dallas, TX64695
Denver, CO7868-10
Houston, TX9275-17
Los Angeles, CA72720
Miami, FL627917
New York, NY11512813
Philadelphia, PA11688-28
Phoenix, AZ6657-9
Portland, OR67681
Riverside, CA7267-5
Sacramento, CA8371-12
San Diego, CA7068-2
San Francisco, CA7059-11
San Jose, CA5956-3
Seattle, WA6457-7
Washington, D.C.8369-14
National7673-3

It took 73 days this winter for a typical buyer to find and close on their new home after their first home tour, faster by four days than during the same period last year and six days faster than its peak in winter 2016, according to a new report by Redfin.

Source: Redifin 

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 4.00 MBS) lost just -2 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move sideways compared to the previous week.

Overview:  While rates were very similar at the end of the week compared to the prior week, we actually had a little volatility during the week with mortgage rates rising due to strong economic news and some positive sentiment on the progress of the U.S./China trade talks.  However, on Friday MBS rebounded which caused rates move back to their starting position at the beginning of the week due to a smaller than expected rise in wages and more turmoil that is the soap-opera of Brexit.

Jobs, Jobs, Jobs: We got the big jobs report on Friday.  You can read the official BLS report here.
Lets look at the Tale of the Tape:
Jobs:
March Non Farm Payrolls (NFP) higher than expected 196K vs est of 180K
February NFP revised upward to 33K from 20K, will be revised again.
January NFP revised upward to 312K from 311K
The more closely watched rolling three month average is now 180K
Unemployment:
The Unemployment rate remains at 3.8% which matched market expectations.
The Participation rate is 63.0% vs est of 62.9%, but it is a decline over Feb’s pace of 63.2%
Wages:
The Average Hourly Earnings moved up by 0.1% on a MOM basis to $27.70 per hour.
Average Hourly Earnings YOY increased by 3.2%, which was below estimates of 3.4%

Services: The March ISM Services (2/3 of our economy) had a very strong and expansionary reading of 56.1, the problem is that the market was expecting 58.0 and we are coming off of a pace of 59.7 in February.  Markit ISM for March was stronger than expected though (55.3 vs est of 54.8)

Retail Sales: This report has been all over the place over the past four months and most economists and bond traders are not giving it the weight that it once enjoyed.  The  February data appears to be much worse than expected with the headline reading at -0.2% vs est of +0.3%, however the miss is because January was revised upward from 0.2% to 0.7%. Same goes for Retail Sales Ex-Autos (-0.4% vs est of +0.4%) as January was revised upward significantly from 0.9% to 1.4%.

Manufacturing:  
The March ISM Manufacturing report was stronger than expected (55.3 vs est of 54.2) This is also much stronger than February’s reading of 54.2 demonstrating that their is an upward, not downward trajectory of manufacturing in the U.S.  Prices Paid were also higher (inflationary) than expected with a 54.3 vs est of 52.5 reading.

Construction Spending:
  The February data was almost three times higher than expectations (1.0% vs est of 0.4%) and January was revised upward from 1.3% to 2.5%.  eading for the bell-weather Chicago PMI was lighter than expected (58.7 vs est of 61.0).  However, ANY reading above 55 is VERY robust growth.  However, Residential Spending dropped by 11.7%.  All the gains were in public works and commercial.

What to Watch Out For This Week:


The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

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Ralph Rossi

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    This information is being provided for Consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties Consumers may be interested in purchasing.
    The data displayed relating to real estate for sale comes in part from the IDX Program of Garden State Multiple Listing Service, L.L.C. Real estate listings held by other brokerage firms are marked as IDX Listing.
    Information deemed reliable but not guaranteed.
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