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Buyers Expand Search In Quest For Affordable Homes


It’s no secret that home prices have been increasing lately, and especially in the nation’s most populous metropolitan areas. So what are home buyers doing to ensure they find – not only a house they love – but one that fits well into their budget? Well one strategy is to look beyond the priciest locations for a more affordable neighborhood in the surrounding area. In other words, home buyers are getting creative in their search for a great home at a great price. And while this usually means moving to the suburbs, in some cases potential buyers are moving even further out. “Buyers have traditionally sought refuge in the suburbs during times of high home prices,†Javier Vivas, director of economic research for the National Association of Realtors’ consumer website. “But with today’s record highs even the suburbs have gotten pricey, which has demand flooding outward as options disappear and prices move further out of reach in top job hubs.†In short, expanding your search radius might be a good way to find a home that’s within reach of both your budget and your job. More here.

A red brick house with autumn trees and overcast sky.

Stock Market Volatility Shakes Mortgage Demand


According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications fell 4.1 percent last week from the week before. But though there was another increase in average mortgage rates, the decline was not seen as solely a reaction to higher rates. In fact, the drop was seen, at least partially, as a response to volatility in the stock market last week. Joel Kan, an MBA economist, told CNBC he still expects activity to grow as we enter the spring season. “Refinance activity is continuing along a floor, while the drop in purchase may be related to short term stock market jitters,†Kan said. “We still expect activity to pick up as we make our way into early spring.†Spring is traditionally the season when the housing market heats up and potential buyers start looking for homes to buy. This year, the spring buying season is expected to be particularly busy, with some saying home buyers are even trying to get a jump on competition by hitting the market earlier than usual. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

A modern suburban house under a sky with the word 'MORTGAGE'.

Bedroom Communities Top List Of Safest Cities


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.

Suburban street corner under a blue sky with scattered clouds.

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.

Luxurious Mediterranean-style house under a vivid blue sky.

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.

Close-up of a U.S. $100 bill featuring Benjamin Franklin.

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.

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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