New York Archives

Remodeling Index Finds Home Repairs On The Rise

Maintenance is a big part of being a homeowner. Put simply, owning a home means having a never-ending to-do list and, depending on your level of know-how, some of it will require the help of a professional. These jobs can range from major renovations such as putting an addition on your house to basic upkeep and repairs like having ducts cleaned and fixing leaks. Essentially, you are your home’s temporary caretaker and how well you take care of it will affect not only how comfortable and enjoyable your home is to live in but also how much you can ask for it when you sell. These days, it seems Americans are increasingly interested in fixing up their homes. In fact, newly released data from the National Association of Home Builders shows home remodeling contractors are busy right now. So what kind of jobs are most in demand? Well, results show demand is highest for basic maintenance and repairs, while additions and alterations – both major and minor – saw slight declines during the second quarter. In short, Americans are tackling their to-do lists and fixing up their homes. This could be due to improved economic conditions and a stronger job market, though it may also be that current homeowners are tending to their homes in hopes of listing them someday soon. More here.

Are Unequal Housing Markets Good For Buyers?

Income inequality is a hot topic these days. But what about housing market inequality? Well, a recent analysis looked at 50 of the largest metropolitan areas with an eye for which had the biggest city-wide disparity between high-end homes and the lowest-priced available homes. The results may surprise you. That’s because, the housing markets with the widest range between the high and low end of the market aren’t necessarily the markets that would immediately come to mind. In other words, cities like San Francisco – which features some of the country’s highest priced homes – were more equal than Midwestern cities where the cost of living is much lower. In fact, the number one most unequal housing market was Detroit, where the home values range from $32,000 to $431,000. Salt Lake City, on the other hand, was the most equal market, with median prices between $191,000 to $597,000. In this case, inequality might just be better for buyers. That’s because, the most unequal markets offer a wider range of prices for buyers to choose from, which means home buyers at all ends of the spectrum will have an easier time locating something that fits their budget. More here.

Gov’t Loan Bump May Mean More 1st Time Buyers

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications was down 2.5 percent last week. But, though there was a decline in the overall number of home buyers looking to secure financing, there was an increase in buyers seeking loans backed by the Federal Housing Administration. And, since FHA loans typically have lower down payment requirements, this could be a indication that, despite the market’s current challenges, first-time home buyers are returning. Mike Fratantoni, MBA’s chief economist, told CNBC last week’s results provide some evidence of that. “The mix of business changed, with FHA purchase volume increasing as conventional and VA volume decreased,” Fratantoni said. “This indicates that more first-time buyers are entering the market, even as the market as a whole continues to be restricted by tight inventories of homes available for sale.” Also in the report, average mortgage rates saw little movement last week, with rates virtually unchanged across all loan categories. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

Builder Confidence Still High In July

This summer, home buyer demand has been high while the supply of homes for sale has remained lower than normal. But, if you’re a builder, those are perfect conditions. After all, when there are more buyers than homes, building more homes is the quickest way to balance the market. Because of that, the National Association of Home Builders’ Housing Market Index – which measures builder confidence on a scale where any score above 50 indicates more builders view conditions as good than poor – has seen an uptick in optimism this year. Builders have been generally positive about the new home market and their prospects for the year. In July, for example, the index scored a 68, with components measuring sales conditions and expectations for the next six months in the mid 70s. In other words, builders are feeling good. And that’s encouraging news for prospective home buyers, as more new homes can help alleviate upward pressure on prices. But Robert Dietz, NAHB’s chief economist, says it’s not all good news. “Builders are encouraged by growing housing demand, but they continue to be burdened by rising construction material costs,” Dietz said. “Builders need to manage these cost increases as they strive to provide competitively priced homes, especially as more first-time home buyers enter the housing market.”

How Long Does It Take Renters To Save For A House?

With rental costs and home prices both increasing, it’s become more challenging for renters to save for a down payment. How much so? Well, according to one recent analysis, the typical renter will have to save for nearly six and a half years to come up with a 20 percent down payment on a median-priced home. And, since the median home value is currently $216,000, depending on your prospective neighborhood, it could take even longer to save up for a house. Renters who aspire to homeownership shouldn’t get discouraged, though. Despite the fact that a 20 percent down payment is the standard amount recommended by financial experts, it is not a requirement in order to buy a house. In fact, depending on the particular terms of your mortgage, you can put down as little as 3 percent. In 2017, for example, 29 percent of first-time buyers had a down payment between 3 and 9 percent. That’s why it’s important to explore your options before deciding homeownership is out of reach. More here.

Americans Are Feeling More Confident Financially

When it comes to deciding whether or not itâ€™s a good time for you to buy a house, your personal finances are a big factor. After all, feeling secure in your job, income, and debts can make taking on a large financial transaction far less stressful. For that reason, Fannie Maeâ€™s most recent Home Purchase Sentiment Index may be encouraging news for the housing market. Thatâ€™s because, though confidence in most of the components â€“ including whether this is a good time to buy or sell a home â€“ was flat or down, those dealing with the direction of the economy and financial expectations for the next year were up. â€œTight supply and lackluster income growth continue to weigh on housing activity, and consumer expectations for home price growth over the next 12 months have moderated,â€ Doug Duncan, Fannie Maeâ€™s senior vice president and chief economist, said. â€œHowever, consumers expressed increased optimism about the direction of the economy and their personal financial situations over the next 12 months, with both measures matching previous survey highs this monthâ€ More here.

Mortgage Rates Fall But Demand Stays Flat

According to the Mortgage Bankers Associationâ€™s Weekly Applications Survey, average mortgage rates were down last week for 30-year fixed-rate mortgages with conforming loan balances, loans backed by the Federal Housing Administration, and 15-year fixed rate loans. But despite falling rates, demand for mortgage applications remained flat, with refinance activity dropping 2 percent and purchase activity up just 1 percent from the week before. Michael Fratantoni, MBAâ€™s chief economist, told CNBC that, though a lower-than-normal number of homes for sale may be holding demand back, first-time buyers are still active. â€œA shortage of inventory remains a significant constraint, but it is interesting to note that applications for government purchase loans fared better on the week, indicating that first-time buyers remain in the market.â€ Government-insured FHA loans offer lower down payment requirements and are, therefore, more popular with younger buyers who may not have saved enough for a 20 percent down payment. The MBAâ€™s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Affordability Perceptions May Be Holding Buyers Back

Perception doesnâ€™t always match reality but, when it comes to financial markets, that doesnâ€™t necessarily matter. For example, if youâ€™ve ever invested in the stock market, you know that a companyâ€™s stock can rise or fall based on the dayâ€™s news, even if the companyâ€™s fundamentals and outlook remain the same as the day before. In short, perception matters. And, in todayâ€™s housing market, thereâ€™s a perception that there are few affordable homes available to prospective buyers. In fact, according to a recent analysis from Fannie Mae, though only 8 percent of homeowners consider their current mortgage unaffordable, 45 percent said that affordable housing is difficult to find in their area. Which provides a snapshot of what is going on in many markets across the country. Homeowners that want to sell may be waiting because they donâ€™t feel theyâ€™ll find an affordable house to move into. The flip side of this, however, is that as long as current homeowners arenâ€™t selling their homes, inventory shortages will continue, which is the primary factor behind recent price increases. More here.

Are Cities Becoming More Popular Than Suburbs?

Suburbs sprouted out of a desire to have the conveniences of urban life but also the space and privacy of living outside the city. In other words, the best of both worlds. And for decades, suburban areas, based on that promise, grew at a faster rate than the nationâ€™s cities. Americans spread out from city centers and moved further and further away. But, according to a new report from the Urban Land Institute, we may now be starting to move back. In fact, between 2010 and 2015, dense urban locations saw their populations grow faster than the residential neighborhoods of their surrounding suburbs. There are a few reasons for this. One is that rental apartment inventory grew at about twice the rate of inventory in the suburbs. Also, there were more jobs created in city centers than in suburbia during this period. However, though there are many factors driving Americans back into the city, the report also notes that urban living costs more, which means younger Americans â€“ who are most likely to desire an urban lifestyle â€“ may be increasingly unable to afford it. More here.

Why Are Younger Americans Buying Fewer Homes?

In recent years, thereâ€™s been a lot of discussion about millennial home buying preferences. Mostly, this is due to the fact that first-time home buyers have historically made up about 40 percent of the home sales in any given year. And, because they account for a large number of the homes sold each year, any fluctuation in those numbers is notable. Thatâ€™s why Freddie Mac recently took a look at why the homeownership rate among young adults has dropped 8 percent since hitting its peak in 2004. As you might imagine, there are a variety of reasons for this. Among them, affordability, not surprisingly, ranks highest. Concern about being able to afford homeownership is always an issue for younger buyers. But there are many other factors that have played a role in suppressing buyer demand among first-time buyers. Some of the other common reasons named included lower marriage and fertility rates, student-loan debt, borrowing constraints, and a preference for urban living, which tends to be more expensive. In short, young Americans â€“ in addition to affordability challenges â€“ have more debt and are starting families later in life. But, though lifestyle and demographic changes have influenced buying activity, Freddie Mac predicts homeownership rates will rebound, if the economy and wages continue to improve. More here.