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City Living May Cost More Than Move To Suburbs


Whether you prefer to live in the city or suburbs depends on a lot of factors. From the size of your family to your age and career, there are many different considerations that come into play when deciding where you might want to settle down. Of course, money is always a major one. Joyce Hodel, a data scientist at Care.com – who recently partnered with Zillow on a cost of living analysis that looked at average housing and child care costs in cities as opposed to suburbs – says choosing where to settle down is a big decision for any family. “Figuring out where your family will live and grow is arguably one of the most exciting and daunting times in a parent’s life,†Hodel says. “While moving to the suburbs often brings significant cost savings, city living can still be the right choice for some families and is less expensive in certain metro areas.†In fact, according to the research, families spend an average of just over $9,000 a year more on basic housing and child care costs when living in cities. However, in some metro areas like Philadelphia and Baltimore, living in the city can actually be the more affordable option. More here.

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Financial Optimism May Boost Housing Market


The number of American households that believe the economy is improving has jumped 14 percent since last year at this time, according to the recently released results of a quarterly survey from the National Association of Realtors. That improvement could have an impact on home buyers and sellers as the spring season begins. That’s because, the more confident a person is in their personal financial situation, the more likely they are to make big life decisions, such as buying or selling a house. And, according to the survey, renewed economic optimism is already having an effect. In fact, a majority of Americans answered positively when asked whether or not it’s a good time to buy a home. Additionally, 69 percent said it’s a good time to sell. William E. Brown, NAR’s president, says if you’re someone looking to make a move this spring, it’s best to have a plan – especially if you’re a current homeowner. “Demand far outpaces supply in many parts of the country right now, which means homeowners will likely sell their home much quicker than the time it takes to buy another,†Brown said. “Before listing, it’s best to have a carefully crafted plan in place.â€

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Will This Year Be Better For Buyers Or Sellers?


If you want to know whether this year is going to be good for buyers or sellers or both, you need to watch for a couple of factors. First, take a look at the housing market. A recent uptick in mortgage rates, combined with higher prices and lower inventory, have made buying a home slightly less affordable than it was a couple of years ago. However, mortgage rates are still historically low and, though prices continue to rise, they have slowed down in many markets. That means, though affordability isn’t what it was a few years ago, buying a home remains an affordable choice. This is especially true when taken together with recent economic data. That’s because, whether or not higher rates will deter potential buyers really depends more on whether or not those buyers feel financially secure and optimistic about their prospects. In other words, if Americans continue to see better job opportunities and higher wages, they’ll be less likely to hesitate when thinking about buying a house regardless of where rates and prices go. According to the most recent outlook from Fannie Mae’s Economic & Strategic Research Group, how things play out will depend largely on young Americans. “Tight inventory remains a boon to home prices and Americans’ net worth, but it also continues to price out many would-be first-time homebuyers,†Doug Duncan, Fannie Mae’s chief economist, said. “However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap.†More here.

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Builder Confidence Reaches 12-Year High


There are a lot of stages a house goes through on its way to becoming someone’s home. And one of the most important steps along that path is its construction. Because builders are there at the beginning of the process, they have an unique perspective on, not only the market, but also home buyers and their preferences. For this reason, the National Association of Home Builders surveys builders each month to get their perspective on the market for new homes. According to the most recent results, builders are more confident than they’ve been at any time since June 2005. But though their optimism hit a 12-year high, Robert Dietz, NAHB’s chief economist, says builders still face some challenges. “While builders are clearly confident, we expect some moderation in the index moving forward,†Dietz said. “Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.†Still, optimism is high, not only about current sales conditions, but also future prospects. In fact – on a scale where any number above 50 indicates more builders view conditions as good than poor – the index component measuring sales expectations over the next six months was up five points to 78. This is encouraging news for buyers because a strong new home market means more new homes get built and more new home construction means less upward pressure on home prices. More here.

House construction under a partly cloudy sky.

Mortgage Demand And Rates Both Climb Higher


According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased last week across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. But despite higher rates, demand for mortgage applications also rose from the week before. In fact, refinance activity was up 4 percent and demand for loans to buy homes moved 2 percent higher than one week earlier. One possible reason for the increase could be a wave of homeowners and prospective buyers trying to lock in rates before they move any higher. But another factor could be job growth. Michael Fratantoni, MBA’s chief economist, told CNBC they expect Americans’ improving financial health to outweigh the potential negatives of higher mortgage rates. “February’s job report showed strong job growth and faster wage growth,†Fratantoni said. “We expect that the benefits from growing household incomes will continue to outweigh the headwind of slightly higher mortgage rates.†The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

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Will Your Next Home Be Bigger Or Smaller?


Over the past 40 years, the typical new home has grown about 1,000 square feet. It seems, for American homeowners, their current home is always smaller than the home they hope to one day buy. But is that always the case? Well, not according to a recent survey from Trulia. Sure, the results show just 32 percent of homeowners say they’d move into a house the same size as the one they currently own. But whether that’s because they feel their house is too big or too small depends on some other factors. Generally, older homeowners and people currently living in homes larger than 2,000 square feet say they’d prefer to downsize, while younger buyers and those living in smaller homes dream of a bigger house. Most of that makes perfect sense. For example, older homeowners may prefer a smaller house due to the maintenance and upkeep issues that a bigger home presents. But when the number of people who say they’d prefer a smaller house rises along with the square footage of their current home, it suggest that there may be, in fact, a point when a house has more space than necessary, regardless of your age. In short, though new homes may keep getting bigger, whether or not you want one probably has more to do with the size of your family, your financial situation, and future life goals. More here.

A small house model sits on a mound of dirt in front of real houses.

Why Aren’t More Homeowners Looking To Sell?


Recent real estate data shows home buyer demand is high. There are a lot of buyers looking to take advantage of current conditions out of concern that mortgage rates may go up this year or prices will rise further. That, along with pent-up demand from younger buyers and previously underwater homeowners looking to finally move, means it should be a great time to sell a house. So, if buyer demand is up and conditions are right, why aren’t more homeowners putting their homes up for sale? Well one reason, according to a recent survey, is that they’re afraid they won’t be able to find a suitable replacement for their current home. With inventory tight in many markets, some homeowners – who may otherwise be ready to sell – say they’re hesitant. However, as more homeowners get in the market and off the sidelines, that will begin to change. In the meantime, buyers looking to purchase a home this spring should expect to see available homes for sale selling more quickly than they did last year. In other words, there will likely be some competition for hot properties. That means, interested buyers will have to move fast. One way to beat the competition is to be prepared. If you’re a buyer, have your financing lined up in advance. That way, when you find a home you’re interested in, you’ll have a better shot at getting in the first offer. More here.

Tree-lined suburban street with houses and a sidewalk.

The Return Of The Gen X Home Buyer

Generally, Generation X is used to refer to people born in the 1960s and ’70s. Because they reached peak home buying age right around the time home prices began to drop, many found themselves underwater on their mortgage and unable to sell their house and upgrade to a larger home. Now, according to the National Association of Realtors 2017 Home Buyer and Seller Generational Trends study, there is evidence that there are an increasing number of Gen X home buyers active in the market. In fact, the most recent increase in buyers from this category was the largest since 2014. Lawrence Yun, NAR’s chief economist, says Gen X homeowners have been in their homes a median of 10 years but may now finally be in a position to put their homes on the market. “Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home.” And, because the number of homes available for sale is low in many markets, a growing number of Generation X homeowners ready to sell could provide the needed inventory boost that helps balance the market and moderate future home price increases. More here.

 

Americans Feel Good About The Housing Market


Each month, Fannie Mae uses the results of their National Housing Survey to determine Americans’ views about housing market conditions and their personal economic outlook. The resulting Home Purchase Sentiment Index breaks down consumers’ responses about the state of their financial prospects, whether or not they feel it is a good time to buy or sell a house, and whether they think home prices and mortgage rates will rise or fall. In February, the index hit a new high and saw five of its six components increase. In fact, the number of respondents who said now was a good time to buy a house was up 11 percent, while 7 percent more participants said it was a good time to sell than did the month before. Increasing optimism was especially noticeable among younger buyers, according to Fannie Mae’s senior vice president and chief economist, Doug Duncan. “Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time home buyers,†Duncan said in a press release. “Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households.†More here.

American flag waving against a clear blue sky.

What New Homeowners Say They’d Do Differently


Buying a house is no small purchase. So you definitely don’t want to find yourself regretting your choice after you’ve signed the papers and settled in. But though we all know it’s an important decision and one to be taken seriously, a lot of new homeowners say they’d do things differently if they had the chance to go through the buying process all over again. This is especially true for younger buyers, according to a new survey from NerdWallet. In fact, outside of baby boomers, a majority of recent buyers said they had regrets. So what are the main things that recent buyers said they’d change if they could? Well, nearly 30 percent of participants said they’d save more money before beginning the buying process. This is likely true for a number of reasons. Among them, the most obvious is the down payment. Though you don’t need to have a 20 percent down payment, the less you invest upfront the more you’ll pay on a monthly basis. In other words, the more you save, the better. Respondents also said they’d have done more research before buying a house. Buyers said they wished they had learned more in advance about both getting a mortgage and the home buying process. More here.

Building facade covered entirely in lush green ivy under a bright blue sky.

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