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Americans Say Now Is The Time To Sell A House

Depending on your plans, the fact that home prices have been increasing lately could be good or bad. After all, current homeowners who are looking to sell a house will feel much differently about higher prices than a first-time buyer who has to save for a down payment. This reality is reflected in the most recent Home Purchase Sentiment Index from Fannie Mae. The index – which measures Americans’ perception of the housing market and economy – reached a new all-time high in May, backed by spiking confidence among potential sellers. In fact, the number of participants who said now was a good time to sell a house is up 14 percentage points over the same time last year. But Doug Duncan, Fannie Mae’s senior vice president and chief economist, says that the optimism about selling has a flip side. “The HPSI edged up to another survey high in May, bolstered in part by a fresh record high in the net share of consumers who say it’s a good time to sell a home,” Duncan said. “However, the perception of high home prices that underlies this optimism cuts both ways, boosting not only the good-time-to-sell sentiment but also the view that it’s a bad time to buy, and presenting a potential dilemma for repeat buyers.” More here.

Pending Home Sales Slow Slightly In April

Between the time an offer is accepted and the deal is closed, a home’s sale is typically referred to as pending. That’s because, there’s a chance, during this period, that the sale won’t go through, as there are a number of hurdles yet to clear. The buyer’s loan and financing have to be finalized and steps like the home inspection and appraisal can also alter the terms of the deal or end it altogether. In short, buying a home is a major transaction and there’s usually a few weeks between the contract signing and closing. For that reason, the National Association of Realtors tracks pending home sales each month, as they can be a good indicator of what future home sales will look like. According to their most recent report, pending sales fell 1.3 percent in April, with most regions flat from the month before. The slight decline was mostly due to a drop in the Midwest. Still, the report is an indication that inventory levels in much of the country are holding sales back. With a fewer-than-normal number of homes for sale, buyers are having more difficulty locating the right house and, as a result, the number of home sales has not matched the level of demand. More here.

How Much Does Your Neighborhood Matter?

When you buy a house, you’re also buying the surrounding neighborhood. And, depending on your lifestyle and wishlist, the neighborhood may be even more important to you than the actual home you’re buying. After all, most of your life happens outside your home. So your proximity to schools, shopping, healthcare, recreation, and nature will have a large effect on how much you enjoy living in a particular house. In short, finding your dream house in the wrong neighborhood could make it a nightmare. Unconvinced? Well, a recent survey of Americans found large majorities who said the feel of a neighborhood was important when deciding where to live. In fact, 80 percent said the surrounding neighborhood had to fit their personality and an almost equal amount said they’d consider moving if they found they didn’t like their new neighborhood. In other words, when shopping for a new house, be sure to spend as much time considering the area around it as you do the areas inside it. It could even work out to be a better idea to find a smaller house in a great location than a big house somewhere you may grow to dislike. More here.

Average Mortgage Rates Down From Previous Week

Home buyers looking to buy a home this spring have their eye on two things: home prices and mortgage rates. Lately, both have been rising but the latest numbers from the Mortgage Bankers Association’s Weekly Applications Survey offers some potential relief. That’s because the survey – which has been conducted every week since 1990 and covers 75 percent of all retail residential mortgage applications – found average mortgage rates were down last week 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. Joel Kan, MBA’s associate vice president of economic and industry forecasting, told CNBC rates fell slightly last week due to concerns about the global economy. “Rates slipped slightly over the week as concerns over U.S. trade policy and global growth sent some investors back to safer U.S. Treasurys,” Kan said. In short, the decline may be a temporary break, as long-term trends remain in place. Still, lower rates, regardless of the reason, are good news for buyers. More here.

The Latest On Where Home Prices Are Headed

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.

Housing Outlook Sees Gradual Gains Ahead

The housing market has been in a bit of a holding pattern lately. While there is a high level of home buyer demand, there are a lower-than-normal number of homes for sale. That means, though sales should be booming right now, they are only making modest gains. But things can change. And, if more houses become available for sale, it could begin to reverse home price trends, making it easier for interested buyers to find and buy homes. So what is likely to happen in the coming months? Well, according to Fannie Mae’s most recent Economic and Housing Outlook, things will grind forward, but we shouldn’t expect major changes in market fundamentals anytime soon. “Housing’s upward grind should continue, despite a lackluster first quarter,” Fannie Mae’s chief economist, Doug Duncan, says. “We expect home sales to post modest gains both this year and next, as prices rise and affordability declines amid low for-sale inventory.” For buyers and sellers who may be waiting for conditions to change before making a move, this means the market isn’t likely to be significantly different in the coming months. More here.

Generation Z May Become Homeowners Earlier

Generation Z – which is defined as people born between the mid-1990s and early 2000s – is quickly approaching adulthood and will soon face the decision of where to live and whether to rent or buy. But, according to a recent analysis, they may be facing challenges past generations didn’t. For example, the results of one study show that they will spend less time renting but will pay more than young people have in the past. With current median rent at $1,418 per month and rising, generation Z is expected to spend $226,000 on rent in their lifetime. That’s a lot. And it’s more than baby boomers or millennials spent. But despite that, generation Z is expected to become homeowners earlier than millennials have. One reason is the cyclical nature of the economy. Another is the fact that more than half say they considered buying before renting their current place. Also, they are just as likely as older generations to say they consider owning a home as part of achieving the American Dream. In other words, if long-term economic trends hold up, the next generation of home buyers will have a better economy and job market to help fuel their dreams of homeownership. More here.

Changes Come To The Luxury Home Market

The high end of the real estate market has followed a different path since the financial crisis and housing crash. But while the luxury home market was able to avoid some of the ups-and-downs the rest of the market has endured, things are beginning to change. In fact, one recent analysis shows the number of homes for sale priced at or above $1 million dollars fell significantly during the first quarter of this year, as compared to the year before. And, if inventory continues to drop, the luxury home market could see some of the spiking prices and competition for available homes that buyers have found in more affordable price ranges. However, those this may be true, the effects have, so far, been far more muted than in the overall market. For example, the average luxury home was on the market for 82 days during the last quarter. That’s faster than the same time last year but much longer than the overall average. For comparison, the National Association of Realtors’ most recent numbers show the typical existing home was on the market for just 30 days, with 50 percent of homes sold in less than a month. More here.

Mortgage Rates Little Changed From Week Before

According to the Mortgage Bankers Association’s Weekly Applications Survey, mortgage rates showed little movement last week and were virtually unchanged from the week before. Rates for 30-year fixed-rate mortgages with conforming loan balances and FHA loans fell slightly, while rates for 15-year loans were flat from the previous week. Jumbo loans saw an increase from one week earlier. But though rates were steady, demand for mortgage applications fell. In fact, both refinance and purchase activity were down from the week before. The week-over-week drop puts demand for loans to buy homes 4 percent higher than at the same time last year. But, despite the improvement, analysts say application demand should be much higher, as the number of interested home buyers has grown. One explanation is that, though there are many buyers active in the market, they are having a harder time finding homes to buy, which has depressed demand for loans. As more homes become available to buy, the numbers will begin to catch up with the current level of interest in buying a home. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

What Would You Give Up For A Down Payment?

Saving money is hard. It takes discipline and means sacrificing some things. It’s also kind of a requirement, if you’re looking to buy a house any time soon. That’s because, you need to have a down payment, if you’re going to buy. So it’s only natural that potential home buyers might fantasize about being able to trade something they already have for a chunk of money to put down on a house. And, according to a recent survey, you might be surprised by what they’d give up in exchange for some no-strings attached money. For example, nearly 50 percent of respondents said they’d give up their dream car for a 10 percent down payment. Another popular answer was giving up eating out or taking a vacation for the next five years. Some participants were even willing to give up their right to vote or their driver’s license. Fortunately, or unfortunately, none of these things are really up for negotiation. Which means, if you’re going to buy a house, you’ll have to come up with your down payment the old fashioned way. More here.