New Home Demand rose by a whopping 19.1% YOY

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Mortgage rates shoot to 2-month high after new report shows inflation is still hot link

• Mortgage rates surged to 7.14%, the highest in two months, following a report indicating persistent inflation. This rate increase reflects the market's reaction to hotter-than-expected inflation data.

• Despite a previous drop to around 6.6% in December, optimism for lower rates in 2024 has shifted to skepticism. The recent spike erodes earlier hopes for a continued downtrend in mortgage rates.

• The housing market showed signs of optimism with an 8% increase in newly built home sales in December, driven by lower rates. However, the latest rate hike could dampen buyer enthusiasm, especially as the spring housing market begins.

Demand rose by a whopping 19.1% in January for new home purchases: MBA link

• Mortgage applications for new homes surged 19.1% year-over-year in January, marking the 12th consecutive month of annual increases. The surge was driven by a lack of existing homes, pushing demand towards new construction.

• New single-family home sales reached a seasonally adjusted annual rate of 700,000 units in January, the highest pace since October 2023, showing a significant 16.9% increase from December.

• Homebuilder confidence reached a five-month high in February, signaling optimism for the spring buying season. This optimism is supported by the strong demand for new homes and the slight decrease in the average loan size for new homes to $401,282 in January.

Falling Mortgage Rates Lift Home Sales link

• Mortgage rates dropped significantly from early November to year's end, leading to a surge in home sales. Builders reported 3.3 sales per community in January, a 10% increase from the previous year and 38% higher than the long-term January average.

• Mortgage rate buydown programs have become increasingly popular, allowing buyers to save on monthly payments. In markets like San Antonio, TX, the share of loans locked in at rates under 5.5% rose dramatically, indicating strong buyer response to lower rates.

• The resale market is beginning to thaw, with a notable improvement in real estate agent sentiment. Over 55% of agents now expect strong sales over the next six months, a significant jump from just 20% in October.

People are moving out of cities with poor air quality — but many end up facing other climate risks link

• Between 2021 and 2022, about 1.2 million more homeowners and renters left U.S. cities with high risks of poor air quality. They're moving to areas with better air but facing other climate hazards like heat and floods.

• Over 85% of homes in 13 major cities, mostly on the West Coast, are highly exposed to poor air quality. This has pushed people to relocate, despite the areas' high home prices, which are 65% higher than in low-risk metros.

• Despite considering climate risks, affordability and job opportunities remain top priorities for movers. Some areas continue to grow in population despite their known risks, highlighting the complex decisions behind migration trends.