condo management Archives

Number Of Price Reductions Is Rising

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.

Inventory And Home Sales Flat In August

Sales of previously owned homes were unchanged from the month before in August, according to new data from the National Association of Realtors. The number of available homes for sale was also flat, with unsold inventory at a 4.3-month supply at the current sales pace. But, though there was little change in the numbers, Lawrence Yun, NAR’s chief economist, says buyers may be getting ready to move. “Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” Yun said. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.” In other words, though there hasn’t been a significant change in conditions, there is a sense that price increases and low inventory are beginning to move in the right direction. This can be seen in the regional results, which show that some areas are improving at a quicker pace than others. Another indicator that relief may be on the way is how long the typical property stayed on the market in August. That’s because, the number of days homes were available before selling moved up for the first time in months. But, despite the improvement, properties are still selling quickly. In fact, the typical home sold in just 29 days in August. More here.

Mortgage Rate Rise May Be Spurring Buyer Activity

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, with rates for 30-year fixed-rate mortgages with conforming loan balances at their highest level in more than seven years. But, despite the increase, mortgage application volume – which includes both buyers requesting loans to buy homes and refinance activity – actually increased from the week before. Could it be that buyers are looking to get into the market before mortgage rates move any higher? Well, purchase loan demand was virtually flat from one week earlier and is now only four percent higher than at the same time last year, when rates were lower. However, the fact that application demand didn’t fall as rates hit a multi-year high indicates that Americans may be hoping to take advantage while they’re still lower than historically normal. Joel Kan, an MBA economist, says rates, once again last week, were driven by positive economic data. “As markets received various pieces of data indicating economic strength such as wage growth, inflation, and jobless claims, Treasury rates were up over the week,” Kan told CNBC. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Lumber Prices And Demand Keep Builders Confident

The new home market is an important indicator for anyone interested in making a move in the near future. Mostly, this is because the number of new homes being built and put on the market has an affect on home prices across the board. And so, keeping an eye on how confident builders feel can be a good way of gauging upcoming affordability conditions. For this reason, the National Association of Home Builders conducts a monthly survey of builders and scores their perceptions on a scale where any number above 50 indicates more of them view conditions as good than poor. In September, their Housing Market Index was unchanged from the month before but still high at 67. Randy Noel, NAHB’s chairman, says builders are feeling optimistic due to a high level of demand and lower lumber prices. “Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” Noel said. “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.” More here.

Americans’ Financial Security Boosts Housing Sentiment

It’s said that there are two sides to every story. But there are also two sides to the calculations potential home buyers undergo when deciding whether or not it’s a good time for them to look for a new house. After all, buyers have to take into consideration the cost of homes in the areas they’re looking to live but also their own financial security. That’s why Fannie Mae’s most recent Home Purchase Sentiment Index is encouraging. Because, though Americans have concerns about housing affordability, they are feeling confident financially and secure in their jobs. In fact, the number of survey respondents who said they aren’t concerned about losing their job rose 15 percent over the month before and those reporting that their income is higher than it was 12 months earlier hit a new survey high. Doug Duncan, Fannie Mae’s chief economist, says Americans are feeling the effects of a stronger economy. “Consumers are attuned to the divergence between the slowing housing market and strong macro economy,” Duncan said. “Consumers were less optimistic this month about both home buying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs.” More here.

Mortgage Rates Fall To Lowest Level In A Month

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates for 30-year fixed-rate mortgages with conforming loan balances fell to their lowest level since July 20 last week. Rates for loans backed by the Federal Housing Administration and 15-year fixed-rate loans also fell, while jumbo loans saw no change from one week earlier. Joel Kan, an MBA economist, told CNBC that the rate drop was due to the fact that the Fed has signaled that they may be more cautious when considering further rate hikes this year. “Treasury yields were lower over the week, primarily driven by a release of FOMC minutes showing that Fed officials may be taking a more cautious approach to the final two expected rate hikes of 2018,” Kan said. But, despite the mortgage rate decline, the number of buyers seeking loans to buy homes did not increase. In fact, the MBA’s Purchase Index fell 1 percent from the week before, though it remains 3 percent higher than at the same time last year. Refinance activity was also down, dropping 3 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential loan applications. More here.

Flat Home Sales A Sign Of Market Challenges

New numbers from the National Association of Realtors show sales of existing homes were virtually unchanged from the month before. Down 0.7 percent from June, sales were up in the West but a drop in the Northeast negated the gains. Lawrence Yun, NAR’s chief economist, says a lack of available homes continues to hold sales back. “Listings continue to go under contract in under a month, which highlights the feedback from Realtors that buyers are swiftly snatching up moderately-priced properties,” Yun said. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.” In short, there are more buyers than there are homes for sale in many markets and it’s making it challenging for buyers this summer. Fifty-five percent of the homes sold in July were on the market for less than a month and, though inventory had been seeing modest gains, it stalled in July. That means, market conditions aren’t likely to change much in the months to come, so buyers should prepare for competition this fall and make sure to be pre-approved by a lender before heading out to look at homes.

Steady Mortgage Rates Lead To Increased Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly flat last week, with little movement seen across all loan categories including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The lack of volatility in the mortgage market led to an increase in demand for both refinance and purchase loans. In fact, mortgage demand was up 4.2 percent over the week before. But Joel Kan, an MBA economist, told CNBC that, despite boosted demand last week, overall purchase application volume is still being hampered by “persistent problems of affordability and low inventory.” Still, demand for loans to buy homes is just above where it was last year at this time and buyer demand remains high – though home sales remain strongest on the higher end of the market. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Builders Remain Confident In New Home Market

The National Association of Home Builders’ Housing Market Index measures how optimistic builders are about the new home market. Scored on a scale where any number above 50 indicates more builders view conditions as good than poor, the survey has been conducted for 30 years and is a good indicator of where the current new home market is and where it may be headed. In August, the index fell one point but remains high at 67. Randy Noel, NAHB’s chairman, says there are some challenges but overall builders are seeing strong demand for new homes. “The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” Noel said. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor, and dearth of buildable lots.” Three-month moving averages show the South and West have the highest level of builder confidence with each scoring in the 70s. The Northeast and Midwest score lower, but that may be due to the fact that there are more existing homes available in those regions, leading to less demand for new homes.

Do You Need An Agent To Buy New Construction?

Buying a newly constructed house from a builder is a little different than buying an older home from its owner. To start with, you aren’t able to choose from a list of upgrades and customizations when buying an existing home. You’re also entering a transaction with someone who has an attachment to the home they’re selling and probably a different set of motivations than a builder whose livelihood depends on making a profit. In other words, it can feel, to a buyer, like the process of visiting a builder’s sales office is so wholly different than buying an existing home that they may not need an experienced real estate agent to represent them. This, however, can be a mistake. After all, you’re still entering into a major financial transaction with many variables and risks. You’ll want to have someone with experience who can look after your best interests and make sure you’re getting the best deal. Otherwise, you’ll be working with a team employed directly by the builder you’re buying from. That doesn’t mean you won’t get a good deal but it does mean you’ll be the only one whose top priority is getting what you want at a fair price. More here.