CoreLogic announced its February 2022 outlook for the housing market, revealing the top metropolitan areas for new home closings, new home sales growth, and mortgage financing for new homebuyers.
The pandemic triggered a massive shakeup within the U.S. that economists and housing experts are calling the Great Reshuffling. During the first 15 months of the pandemic, the states of New York and California lost a total of more than 600,000 population, while Texas and Florida gained 600,000. Meanwhile, Arizona and North Carolina also gained more than 100,000 people each to round out the list of top four states by population gain.
CoreLogic’s analysis of the top 10 new home settlements during the past year shows that 8 of the 10 metros with the largest number of new home closings were in the 4 states with the largest population gain. The Dallas and Houston metro areas topped the list, with a combined total of more than 80,000 single-family home closings.
Markets that had the largest percentage jump in new home settlements compared with the prior year show 9-of-10 were in states with population growth rates well above the national rate. Common attributes that these markets have are a lower cost-of-living, lower population density, and nearby outdoor amenities.
Buying a new home in a lower cost-of-living market means the average sales price is typically higher than for an existing home and will require financing. The buyer’s choice of mortgage product to finance the purchase varies with the sales price. For new homes that sold for less than $250,000 last year, about one-half were financed with an FHA or VA loan and the rest by a conventional loan. For homes selling above $1 million, nearly all the mortgages were conventional, and most of these were jumbo loans that exceeded the loan limits of Fannie Mae and Freddie Mac.
CoreLogic expects new home sales to increase in 2022 with the biggest gains in places with high population gains, projected to be Texas, Florida and Arizona.
