New-home sales fall 4.7% in August

😄 Welcome back. Let's Friday together. Today’s newsletter is a 2.5-minute read.

1. The home mortgage refinance mini-boom

Mortgage applications have surged to their highest levels since July 2022, driven by a wave of homeowners refinancing their loans amid declining interest rates.

The MBA's overall applications index jumped 11%, reaching its highest point since July 2022. This growth was largely fueled by a 20% rise in refinance applications from the previous week, marking a staggering 175% increase compared to the same period in 2023. Meanwhile, purchase loan applications saw more modest growth, increasing 0.4% week-over-week and 2% year-over-year.

2. New-home sales fall 4.7% in August

New home sales dropped 4.7% to a 716K unit pace during August. The decline offset the strong jump in sales the month prior.

Despite the dip, the pace of new home sales continues to be relatively sturdy on account of builder pricing incentives and a scarcity of available homes in the existing market.

Looking ahead, lower mortgage rates should eventually provide a boost to new home sales, but affordability challenges and a softer labor market will likely limit the rebound.

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3. More Nuggets

💼 The mortgage industry is hiring again – but on different terms. (Yahoo)

🫂 Real Brokerage expands in 13 states with addition of 40-agent team. (OneReal)

💰 Invitation Homes to settle FTC claims of unfair rental practices for $48M. (FTC)

🏘️ Investors are purchasing fewer homes, but they still account for nearly 25% of sales. (CoreLogic)

🚨 Coach’s Corner

You can’t Work with Everyone! Here are my thoughts on this and why you don’t want to either. (Video)

— Dave Krichmar CEO

4. Zillow listings will now highlight climate risks, insurance info

For-sale listings on Zillow will now feature detailed climate risk information for five key categories — flood, wildfire, wind, heat and air quality — along with insurance recommendations, according to the online real estate company.

The climate risk data, provided by climate risk financial modeler First Street, will be available on for-sale property listings across the U.S. directly on listing pages, complete with risk scores, interactive maps and insurance requirements.

5. Mortgage rate-locks for vacation homes hit new low

Recent data from Redfin found mortgage-rate locks for second homes — often vacation or investment homes for those who already own a primary residence — dropped 13% in August. That's more than twice the drop observed among primary homes and the lowest level since March 2016.

• Rate locks for second homes were down 59.2% from pre-pandemic levels, compared with a 31.9% drop in rate locks for primary homes.

This drop can be partially explained by some second-home buyers opting to pay in cash, skipping the mortgage process and avoiding elevated interest rates. But it could also suggest second homes are an investment buyers cut back on when prices soar.

☀️ You’re all caught up. See you on Monday!

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