Citadel NYC Archives

The Absolute Best Time To List Your Home

Though itâ€™s commonly said that spring is the most popular time for home buyers to begin looking at houses, a new analysis has narrowed it down even further. In fact, the Zillow Group Report on Consumer Housing Trends pinpointed the best two weeks of the year to list a house. The study found that homes listed between May 1stÂ and 15thÂ sold nine days faster than the average listing. Additionally, homes that were listed during that time frame sold for 1 percent above average. However, you may not be able to expect the same success if youâ€™re selling a house in an area with a warmer climate. Thatâ€™s because, regions where the weather doesnâ€™t change as drastically from season to season will see less variation in sale price. According to Zillowâ€™s chief economist, Dr. Svenja Gudell, thereâ€™s one possible reason homes listed near the end of April or beginning of May do so well. â€œMany home buyers who started looking for homes in the early spring will still be searching for their dream home months later,â€ Gudell said. â€œBy May, some buyers may be anxious to get settled into a new home â€“ and will be more willing to pay a premium to close a deal.â€ The report also found that homes listed on a Saturday got 20 percent more views in their first week than those listed earlier in the week. MoreÂ here.

How Inflation Might Affect The Housing Market

The dictionary definition of inflation is a â€œsubstantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency.â€ In other words, inflation means you get less bang for your buck. And, according to a new outlook from Freddie Mac, it has shown signs it may be about to increase, which could have an impact on the housing market. â€œWhich course inflation takes over the next year will have important implications for housing and mortgage markets,â€ says Sean Becketti, Freddie Macâ€™s chief economist. If inflation heads higher â€“ the outlook imagines â€“ interest rates could also rise and lead to falling home sales and mortgage originations. The good news, however, is that Freddie Mac believes inflation will rise only modestly over the next two years. Thatâ€™s encouraging for potential home buyers worried about deteriorating affordability conditions. â€œWith the housing market on the verge of the spring home buying season, this is good news in an environment where historically low mortgage rates will help offset the pace of house price growth and lack of for-sale inventory in many markets,â€ Becketti says. In short, there is a chance inflation could rise depending on upcoming trends and economic policy but, more than likely, the increase will be gradual and shouldnâ€™t affect housing market activity in the near term. MoreÂ here.

Lower Rates Give Buyers Spring Fever

The Mortgage Bankers Associationâ€™s Weekly Applications Survey is a measure of both mortgage rates and demand for loan applications. Conducted weekly since 1990, the survey is a good source for tracking market trends. According to the most recent survey, average mortgage rates fell last week across all loan categories. Rates declined for 30-year fixed-rate mortgages with both conforming and jumbo balances, 15-year fixed-rate loans, and mortgages backed by the Federal Housing Administration. MBA economist, Joel Kan, said the rate drop was largely due to events overseas. â€œRates declined last week as investors favored U.S. Treasury bonds due mainly to political concerns from abroad,â€ Kan told CNBC. Regardless of the reason rates moved lower, prospective buyers took advantage. In fact, demand for loans to buy homes rose 7 percent from the week before. But because spring is typically the busiest time of year for home buyers, some of that spike might have to do with the approaching sales season more than the rate drop. Also in the report, refinance activity climbed 5 percent over the previous week. It is now at its highest level so far this year. The weekâ€™s results contain an adjustment for the Presidentsâ€™ Day holiday. MoreÂ here.

Home Buyer Demand Hits Post-Recession High

Though this year’s real estate market may not look as buyer friendly as it has in recent years, demand is at its highest level since the Great Recession, according to the National Association of Realtors’ chief economist, Lawrence Yun. Yun says Americans are feeling more confident about their financial status due to better job prospects and recent stock market gains. That, of course, is positive news. But the flip side of increasing buyer demand is more competition for available homes at a time when for-sale inventory is lower than normal in many markets. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago,” Yun says. “Most notably in the West, it’s not uncommon to see a home come off the market within a month.” So what does this mean for the spring season? Well, if you’re a prospective buyer, it means you should be ready to move quickly when you find a house you’re interested in. It also means you should be on the lookout for rising prices. Where there are more home buyers than available houses, price increases will accelerate. Yun warns that, especially in expensive markets, “prospective buyers will feel this squeeze in their budget and will likely have to come up with additional savings or compromise on home size or location.” More here.

Market For New Homes Strong In January

In January, sales of newly built single-family homes increased 3.7 percent over the previous month and are now 5.5 percent higher than last year at the same time, according to new numbers released by the U.S. Census Bureau and the Department of Housing and Urban Development. But though the improvement was solid, it didnâ€™t meet economistsâ€™ expectations. Surveyed economists were predicting a 6.3 percent sales increase. Weather could be among the possible reasons sales didnâ€™t perform as well as expected. For example, a look at regional results shows sales up by double digits in the Northeast and Midwest. The South also saw gains, rising 4.3 percent from the month before. In the West, however, sales fell â€“ which may be due to the fact that the west coast has had an unusually rainy winter. Overall, though, the news was positive, with sales signaling a boost in consumer confidence and a healthy level of demand among prospective buyers. It also shows that interested buyers have not been deterred by the rise in mortgage rates. The median sales price of new homes sold in January was $312,900. The average sales price was $360,900. MoreÂ here.

What You Need To Know About Property Taxes

There are a lot of things to focus on when you’re shopping for a house. Just for starters, you have to find the right house at the right price. That isn’t necessarily going to be easy. But you also need to figure out how much of a down payment you’re going to have, how much you’ll need for closing costs, how you’re going to move your things, and what you’ll have left over once the dust settles. For that reason, a lot of prospective buyers forget to think about how much they’ll be paying each year in property taxes. This can lead to some unwelcome surprises down the road. So what should you expect? Well, the way property taxes are calculated can vary widely depending on where you live – so can the amount. In fact, a recent state-by-state analysis from CoreLogic found taxes, as a percentage of total property value, can range anywhere from less than half a percent to nearly three percent. Illinois is home to the country’s highest property taxes, with a median rate of 2.67 percent. Other states with taxes over two percent include New York, New Hampshire, New Jersey, Connecticut, and Texas. On the other end of the spectrum, the lowest property taxes in the country are found in Hawaii, where the median tax rate is 0.31 percent. South Carolina, Wyoming, Alabama, Colorado, and South Dakota, among others, were also found to have property tax rates of less than one percent. More here.

Is January’s Sales Spike A Sign For Spring?

There has been a lot of discussion lately about what the housing market will look like this year. Will higher mortgage rates and rising prices hold off buyer demand or will consumer confidence and a better job market fuel a spike in sales regardless of what rates and prices do? One early answer comes in the form of the National Association of Realtors’ latest home sales figures. In January, for example, the number of previously owned homes that were sold was 3.3 percent higher than the month before and reached its strongest pace in a decade. This could be a sign that this spring’s real estate market will continue to build on last year’s strength. Lawrence Yun, NAR’s chief economist, says the January report shows that consumers are coming out despite the changing landscape for home buyers. “Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of the year appear to have sparked considerable interest in buying a home,” Yun said. “Market challenges remain, but the housing market is off to a prosperous start as home buyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.” Regionally, home sales saw strong gains in the West, South and Northeast but fell 1.5 percent in the Midwest. Also in the report, home prices experienced their biggest increases over last year in the West, South, and Midwest. The Northeast, on the other hand, only saw a modest increase year-over-year. More here.

Mortgage Rates See Slight Increase Last Week

Average mortgage rates were up last week, according to the Mortgage Bankers Association’s Weekly Applications Survey. Mortgage rates increased across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, 15-year fixed-rate loans, and mortgages backed by the Federal Housing Administration. Despite the increase, however, rates remain roughly within the same range they’ve been since they jumped last November. Joel Kan, MBA’s associate vice president of industry surveys and forecasting, says last week’s increase was related to expectations that the Fed might raise interest rates soon. “Rates were up last week as markets assessed that the Fed might increase rates sooner than expected on the strength of a recent pick-up in inflation readings” Kan told CNBC. Whatever the reason, higher mortgage rates have taken a toll on refinance activity, which dropped again last week. Demand for loans to buy homes also fell last week and, according to Kan, isn’t as high as it usually is at this time of year. Typically, buyers are beginning the mortgage process in anticipation of the spring season. This year’s lull may be due to higher interest rates, though it may also be the result of there being fewer homes available for sale in many markets across the country. More here.

Why New Homes Matter Even If You Don’t Buy One

If you follow real estate, you’ve heard a lot about inventory lately. That’s because, inventory – which refers to the number of homes available for sale – plays a big role in how much house the typical buyer can afford. When there are more homes for sale than there are interested buyers, home prices fall. These days, there are a lower-than-usual number of homes available to buy in many markets, which is why prices have continued to rise across the country. Of course, one good way to boost inventory is to build new homes. New home construction produces more choices for buyers and more competition among sellers, which helps balance the market. For this reason, the National Association of Home Builders regularly surveys builders to get a feel for whether they are optimistic about the market and likely to build more homes. The NAHB’s Housing Market Index scores builders answers on a scale where any number above 50 indicates more builders feel conditions are good than poor. In February, the index fell two points but remains in positive territory at 65. Granger MacDonald, NAHB’s chairman, says builders are generally optimistic. “While builders remain optimistic, we are seeing the numbers settling back into a normal range,” MacDonald said. Regionally, the Northeast and South were down, while the Midwest rose one point and the West was unchanged at 79. More here.

Despite Challenges Outlook Sees Growth Ahead

The housing market is always evolving – and at different rates depending on where you live. Whether you’re looking at new home construction or mortgage rates, the numbers are always in flux. Because of this, Fannie Mae’s monthly Economic & Strategic Research Group releases a monthly Economic and Housing Outlook to analyze where things may be headed. According to their most recent release, it’s difficult to forecast how things may play out through the rest of this year. On the one hand, lower inventory and higher mortgage rates suggest that affordability conditions will make it tougher for buyers looking for a house this year. On the other, the job market, wages, and economic optimism have all been trending upward recently, which could help offset some of the challenges ahead for buyers. Overall, Doug Duncan, Fannie Mae’s chief economist, says housing should continue to grow. “We expect housing expansion to continue, albeit at a more moderate pace than last year given continued pressure on affordability,” Duncan said. “Depressed inventory, particularly in the more affordable segments, will likely constrain sales and push home price gains that outpace income growth.” The report notes, however, that early indicators show buyer demand is still strong. In fact, both pending home sales and demand for loans to buy homes have recently shown an upswing. More here.