Naturally, potential home buyers become more concerned about affordability conditions as prices and mortgage rates rise. And since the past few years have seen both things happen, there’s been increasing concern about whether or not now is a good time to buy a house. That’s not to say there hasn’t been demand for homes. In fact, there are plenty of interested buyers and not enough homes to accommodate them, which is why prices have been rising in the first place. But recently, there’s been more data suggesting that home prices are beginning to soften. In fact, one recent report shows that 26.6 percent of homes listed for sale in September dropped their price, which is a nearly 5 percent increase from the same time last year. That’s good news for buyers, as is the fact that price drops have been showing year-over-year improvement since the end of March. Added to the fact that mortgage rates, while higher than last year, are still well below what is historically normal, the news about home prices means affordability may, once again, be moving in a more balanced direction and one that benefits buyers. More here.
Home prices are a top concern for both home buyers and sellers. After all, a lot of the calculus that goes into determining whether or not it’s a good time to sell or buy a house is based on where home values are and where they are expected to be in the future. For that reason, it’s good to follow the S&P Case-Shiller Home Price Indices, as they are considered the leading measure of U.S. home prices. According to the latest data, prices have continued to rise at around the same pace they’ve been increasing, with both month-over-month and year-over-year data showing little change. In short, prices are going up but no faster than they have been. David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says things aren’t expected to change any time soon. “Unless inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” Blitzer says. But despite rising prices, Blitzer notes that the market is calmer today than it was during the last price boom in the early 2000s. More here.
A “bedroom community” refers to a suburb outside a major metropolis where the majority of residents commute to the city for work. These town have a number of characteristics that identify them but, according to new research from NeighborhoodScout, they are also known for safety. In fact, these suburban cities topped their most recent list of the nation’s safest cities. Andrew Schiller, CEO of NeighborhoodScout, says bedroom communities combine features that are attractive to home buyers. “We continue to see bedroom communities, which are within large metro areas and near major urban centers like Boston, Chicago, and New York, make the top of our list,” Schiller says. “These safe communities within the urban/suburban fabric of America’s largest metropolitan areas often combine access to high-paying jobs in the urban center, decent schools, and a high quality of life. This access to opportunity increases home values, with the result often being lower crime.” Cities in the Northeast topped the list, including Ridgefield, CT, which was named the country’s safest city. More here.
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.
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.
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.
If you’re thinking about buying or selling a home any time soon, you should probably know something about disclosure requirements in your state. In short, disclosure requirements are put in place to make sure homeowners selling a house let potential buyers know of any and all issues there are with the house that might not be otherwise obvious. Things like defective appliances or systems, roof leaks and age, foundation problems, existence of radon or asbestos, water damage, neighborhood issues, termites, etc., are the types of things that a homeowner must let a buyer know about before the sale. This is to protect both the buyer and the home seller, as it also safeguards against any possible litigation after the home’s sold. As a home seller, you won’t be liable for anything you didn’t know about but disclosure requirements are meant to ensure that a home buyer has as much knowledge about a property as reasonably possible before signing any papers. That means, you should always err on the side of too much information, rather than too little. To learn more about your state’s requirements, click here.
To those who’ve been through it before, the home buying process may seem less complicated and intimidating than it does to someone who hasn’t had the experience. Take millennials, for example. The generation – roughly defined as being between the ages of 18 and 34 – are approaching, or have already arrived at, an age when Americans typically start thinking about buying their first home. Without any prior experience or knowledge, however, many feel confused about their options and anxious about the whole endeavor. In fact, according to a recent survey, millennials have a number of concerns. Unsurprisingly, having enough money for a down payment topped the list. But almost half said not knowing how to start the process was also an issue, followed by bad credit and too much debt. In other words, millennials are interested in buying a house but may be holding off due to misconceptions about the financial requirements or confusion about how to get started. Fortunately, the process is far less daunting than it may seem and, with the help of a good lender, exploring the available financing options can make buying a home not only less intimidating but also attainable. More here.
If you’re in the process of, or thinking about, buying a house, you’ve probably done some calculations in your head about how much you’ll need for a down payment and what your prospective mortgage payment might look like. But you may not have given any consideration to how much you might spend after you’ve closed the deal. Simply put, you’re going to want to leave the closing table with a substantial amount of money left over because new home buyers spend about $10,601 in their first year as owners, according to new numbers released by the National Association of Home Builders. That includes things like furniture, appliances, and remodeling or home improvement projects. But in total, new homeowners spend nearly three times as much in their first year than a typical homeowner would in an average year. Of course, the condition of the home you buy will play a large role in how much money you end up spending after the move. But, no matter how move-in ready the home is, you’re likely going to want to make some changes once you’ve settled in. That’s why it’s important to stick to a budget and not totally deplete your savings when choosing a house to buy. More here.
Whenever the topic of millennial home buyers comes up, the assumption is that they’re all searching for urban lofts and using the latest tech to find them. In other words, the next generation of home buyers isn’t interested in the old way of doing things. However, survey after survey seems to contradict those assumptions. In fact, recent surveys have found millennials are far more traditional than most assume. For example, a recent survey of Americans between the ages of 18 and 34 found large majorities said they’d prefer to work with a local real-estate agent and lender as opposed to online services when searching for a house to buy. Doria Lavagnino, co-founder and president of CentSai, the company behind the survey, says younger buyers want the comfort and reassurance of a recommendation from someone they trust. “Buying a home for the first time is daunting, and working with a local agent – particularly an agent referred by a parent or friend – could provide peace of mind.” The survey also found a majority of respondents said they plan to buy in the next two years and – among those who said they don’t plan on buying – nearly 70 percent said it’s because they can’t afford to, rather than because they prefer to rent. More here.