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55+ Homeowners Account For 67% Of Home Equity


Equity is among the main arguments in favor of homeownership. After all, as you pay your mortgage each month, you are, in essence, putting away money that you will be able to draw from should you ever sell your house or take out a home equity loan. In short, homeownership can act as a type of forced savings account. The results of the Federal Reserve’s most recent Survey of Consumer Finances provides some evidence of this. According to the survey, homeowners over the age of 55 held $10.6 trillion in residential equity, which accounts for 67% of the $15.8 trillion total equity for all primary residences in the U.S. In other words, older homeowners – who are more likely to have owned their home for an extended period of time – have built up a lot of equity, either through paying off their mortgage over time or through price appreciation. Either way, for those homeowners, owning a home has provided a financial asset that can benefit them in retirement. For example, research shows buyers in age-restricted communities often don’t take out a mortgage – since they are able to use the equity they’ve acquired as a source of a down payment. More here.

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Single Home Buyers Face Added Challenges


Without the benefit of two incomes, single home buyers face some added challenges when looking to buy a house. For one, it takes longer to save for a down payment. In fact, according to a new analysis, married or partnered couples can save a 20 percent down payment on the typical home in less than five years. For single home buyers, it takes closer to 11 years. Add to that, single home buyers are more likely to be looking for a smaller, affordable home – which is precisely the type of house that is currently in highest demand. Zillow senior economist, Aaron Terrazas, says two incomes helps with savings but also with increasing the number of homes available to buy. “Single buyers typically have more limited budgets, which means they are likely competing for lower-priced homes that are in high demand,†Terrazas said. “Having two incomes allows buyers to compete in higher priced tiers where competition is not as stiff.†Of course, your individual financial situation and local market conditions will ultimately determine how much you’ll need to save and how much competition you’ll face for available homes. But single, married, or otherwise, it’s best to be as prepared as possible before heading out to look for a house to buy. More here.

A house with a "For Sale" sign in the front yard.

Americans’ Interest In Housing Market Heats Up


As spring approaches, there’s always an increase in the number of Americans who express interest in buying or selling a house. For many reasons, spring is traditionally the season when the housing market heats up. So, it’s no surprise that Fannie Mae’s most recent monthly measure of Americans’ feelings about the housing market shows an increase in optimism. In fact, the number of survey respondents who said now was a good time to buy a house rose 3 percent from the month before and the number who feel it’s time to sell rose to a new survey high. In other words, interest is high. But, according to Doug Duncan, Fannie Mae’s chief economist, it’s difficult to say yet how the market will perform this year. “Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances,†Duncan said. However, with high interest from buyers and sellers, and a growing economy, early signs point to a busy spring for the housing market. More here.

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Home Sellers Realize Highest Return Since 2007


Naturally, as home prices have increased, so too has the amount of profit homeowners see when they sell their home. Now, according to new numbers from ATTOM Data Solutions, homeowner profits have reached their highest point in more than 10 years. In fact, according to their Q4 2017 U.S. Home Sales Report, the average home seller profit has reached 29.7 percent return on investment compared to the original purchase point. Daren Blomquist, senior vice president at ATTOM, says now is the most profitable time to sell in years but homeowners aren’t moving as often as they used to. “It’s the most profitable time to sell a home in more than 10 years yet homeowners are staying put longer than we’ve ever seen,†Blomquist said. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.†More here.

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Housing Market Has Momentum To Start The Year


If you look at just about any reading of the current housing market, you’ll find that there are a lot of Americans interested in buying a home right now. Whether it’s because of pent-up demand that built up in the years following the housing crash or a drive to buy now while mortgage rates are still well below their historical norm, the fact is buyer demand is high. The most recent National Association of Realtors’ Pending Home Sales Index provides more evidence of this. That’s because the index – which measures the number of signed contracts to buy homes – ended the year with its third consecutive monthly increase. Lawrence Yun, NAR’s chief economist, says the housing market has started the year with a little bit of momentum. “Another month of modest increases in contract activity is evidence that the housing market has a small trace of momentum at the start of 2018,†Yun said. “Jobs are plentiful, wages are finally climbing and the prospect of higher mortgage rates are perhaps encouraging more aspiring buyers to begin their search now. More here.

Close-up of a red and white 'PENDING' sign outdoors.

Mortgage Rates Move Higher For 2nd Straight Week


According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved higher for the second consecutive week last week. Rates were up across all loan categories, including 30-year fixed-rate mortgages, loans backed by the Federal Housing Administration, and 15-year loans. Joel Kan, an MBA economist, told CNBC that rates are being driven higher by economic conditions. “Rates moved higher last week driven by concerns over a weaker U.S. dollar, signs of more robust growth and rising rates abroad, and moderately strong fourth-quarter domestic growth,†Kan said. With rates rising, there was a decline in mortgage application demand. The number of homeowners looking to refinance and potential buyers requesting applications for loans to buy homes both saw a drop, with total demand falling 2.6 percent from the week before. However, mortgage rates still remain low by historical standards – though there is a belief that, with a strengthening economy, interest rates could rise further this year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Close-up of a worn dollar bill with the word 'MORTGAGE' stamped across it.

Home Price Climb Means Buyers Need To Prepare


It isn’t news that home prices have been headed upward for awhile now. And, according to the latest S&P Case-Shiller Home Price Indices, they are continuing to climb at around the same pace as they have been in recent months. Which is to say, the price increases haven’t yet slowed. Of course, how quickly prices are increasing depends on where you’re looking to buy. Large metropolitan areas – and especially those in the West – are seeing the sharpest increases, while the price gains are more muted in the Midwest. But, no matter where you are, the best way to prepare for higher prices is to know what you want, what you can afford, and where your limits are. In competitive and higher priced markets, having a firm idea of what you can spend and where you’ll compromise will make it less likely that you’ll end up going over budget because of a bidding war or buying more house than you can comfortably afford. Making sure you’re prepared before heading out to look at homes also means securing financing in advance, so you’ll be ready to make an offer when you find a home you love. More here.

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Forecast Sees Little Change On The Horizon


Depending on the results of the most recent monthly housing report, you might get the impression that the market is horrible or just fine. Mainly, that’s because monthly real-estate reports often show an exaggerated amount of volatility. In other words, month-to-month results are typically far more up-and-down than what you’d see if you took the longer view. According to Fannie Mae’s most recent Economic and Housing Outlook, that’s especially true these days. Conditions have been pretty steady for the last year and will likely remain that way for the upcoming year. Doug Duncan, Fannie Mae’s chief economist, says the real estate market will likely remain unchanged despite changes to tax laws and monetary policy. “The new tax laws are likely to motivate a mixed response in the housing market: Increased disposable household income should lead to greater housing demand, but changes to deductions essentially reduce the subsidy for homeownership,†Duncan said. “On balance, we expect the housing market in 2018 to encounter many of the same challenges as last year, including inventory shortages, particularly in the middle and lower-end of the market, and affordability headwinds.†More here.

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Improvement In New Home Market Is Good For Buyers


The number of new homes being built and sold has become an important indicator for the housing market in recent years. That’s because, a shortage of homes for sale has caused prices to steadily increase. And, since the quickest way to add inventory to any particular market is to build new homes, there has been a lot of focus lately on the new home market and how it impacts home buyers and sellers. According to the latest numbers, last year saw an 8.3 percent increase in new home sales over the year before. That’s good news for real estate, as an increasing number of sales should lead to an increasing number of new homes being built. And, to that end, there were 295,000 new homes for sale at the end of December, which is the highest level since April 2009. In short, if builders continue to build more homes, the increased inventory should help moderate price increases which will make affordability conditions more favorable for the rising number of Americans who say they’re interested in buying a home. More here.

Newly built suburban houses on a clear day.

Existing Home Sales Reach 11-Year High

According to new numbers from the National Association of Realtors, last year was the best in more than a decade for sales of previously owned homes. Existing home sales ended the year at an estimated 5.51 million sales, surpassing last year’s mark and proving Americans have a strong desire for homeownership. Lawrence Yun, NAR’s chief economist, said sales should’ve been even higher. “Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” Yun said. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.” However, Yun believes rising wages and an expanding economy will help boost housing even further in 2018, helping to push last year’s gains even higher.

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