property management Bronx Archives

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.

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.”

Americans Say They Want To Own A Home In Retirement

The vast majority of surveyed Americans say that homeownership is among their retirement goals, according to a recent survey. In fact, 85 percent of non-retiree respondents said they want to own their own home in retirement and believe they can pay off their mortgage before they retire. But, though non-retiree participants feel like they’ll have their mortgage paid off in time, more than 25 percent of retired respondents said they’re still paying off a mortgage and over half of those had a balance of more than $50,000. In short, Americans may be a bit too optimistic. But regardless of whether or not they make it, the debate about homeownership and retirement will continue. On the one hand, tax breaks and equity make a good case for the wealth-building benefits of owning a home. But, on the other hand, property tax, maintenance and potential renovation costs can add unpredictability to a household budget that may largely be fixed. In the end, which situation is the right one for you will ultimately depend on your personal finances, assets, and outlook – as there is no one-size fits all strategy for meeting your retirement goals. 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.

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.

The Rising Cost Of Renting A Home

When debating whether to rent or buy your next place, the argument in favor of renting usually includes the fact that itâ€™ll be cheaper â€“ especially since you donâ€™t have to pay for closing costs or save for a down payment. However, renting a place isnâ€™t all that cheap these days and, depending on what youâ€™re looking for, prices may be rising even faster than expected. According to recently released data, rental rates are increasing and particularly among two and three-bedroom homes. In fact, rental homes, generally, are climbing in price faster than apartments. Nationally, a typical two-bedroom now costs $1,310 per month and the cost for a typical three-bedroom is up to $1,445. And, depending on your local market, it could be even higher. So why is rent rising faster for homes than it is for apartments? Well, for some of the same reasons home prices are climbing. For one, new, and smaller, apartments are the focus of most rental unit construction, while the supply of single-family homes to rent is mostly fixed. More here.

Mortgage Rates Show Little Movement Last Week

According to the Mortgage Bankers Associationâ€™s Weekly Applications survey, average mortgage rates were up-and-down last week, with rates for 30-year fixed-rate mortgages with conforming loan balances relatively flat and mortgage rates for jumbo loans and those backed by the Federal Housing Administration down from the previous week. Joel Kan, an MBA economist, told CNBC rates are reacting to concerns over trade policy. â€œConcerns over trade between the US and China persisted last week,â€ Kan said. â€œAnd, these concerns outweighed positive news on housing starts and a generally bullish view on second quarter US growth.â€ In short, rates didnâ€™t move much last week because positive economic news was balanced by concerns about future changes to trade policy. But despite unchanged rates, buyers retreated from the market, with the MBAâ€™s survey finding a 6 percent decline in the number of Americans requesting applications for loans to buy homes. This could be due to affordability challenges or low inventory in some markets. Whatever the case, applications for loans to buy homes are now just 1 percent higher than they were at the same time last year. More here.

Steady Rates Lead To Boosted Mortgage Demand

A quiet week for interest rates led to a boost in mortgage demand, according to the most recent results of the Mortgage Bankers Associationâ€™s Weekly Applications Survey. Overall demand was up 5.1 percent from the previous week, which helped push the MBAâ€™s purchase index 3 percent higher than the same week one year ago. The weekâ€™s results also showed a spike in refinance activity, reversing recent declines. Joel Kan, an MBA economist, told CNBC that there were offsetting concerns last week that led to the lack of movement in rates. â€œIt was a mixed week for rates in MBAâ€™s survey,â€ Kan said. â€œTreasury yields finished the week slightly higher as a hawkish statement from the FOMC and market jitters caused by trade concerns and other geopolitical uncertainty offset each other.â€ The MBAâ€™s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.