property management Archives

Nearly 60% Of Homes Within Reach of Typical Buyer

Not surprisingly, affordability ranks high among home buyers’ concerns. Rising prices and rumors of future mortgage rate increases have some prospective buyers questioning whether or not they can handle the financial obligations that come along with homeownership. However, new data from the National Association of Home Builders says, in most markets, they can. That’s because, the NAHB’s quarterly measure of affordability found 58.3 percent of new and existing homes sold between the beginning of July and the end of September were affordable to families earning the median income of $68,000. That’s encouraging news for hopeful home shoppers. And, according to Robert Dietz, NAHB’s chief economist, there are a rising number of them hoping to take advantage of conditions while they’re still favorable. “Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand,” Dietz said. “Tight inventories and a forecast of rising mortgage interest rates through 2018 will keep home prices on a gradual upward path and slowly lessen housing affordability in the quarters ahead.” More here.

Figuring Out The Best Down Payment Strategy

Coming up with a down payment strategy can be difficult for some buyers – especially first-time home buyers who don’t have the benefit of a home to sell. In fact, among first-time home buyers, nearly 60 percent put less than 20 percent down on their house. And while that can be a good option for some buyers, it does have downsides. For one, smaller down payments typically mean you’ll have to pay mortgage insurance. It also means you may be edged out when making an offer on a home. Data from Zillow shows that buyers with larger down payments are more likely to get their offer accepted. On the other hand, waiting to save a larger down payment means risking an increase in home prices that makes it so you can’t afford next year what you could afford right now. What is the best move for today’s buyer? Well that depends a lot on their personal financial situation and how much they already have saved. But, according to Zillow, the median home will be worth just over $6,000 more next year at this time – which means you’ll have to save an additional $105 per month to cover the rise in prices. More here.

Housing Sentiment Cools Heading Into Fall

There are many reasons autumn is a good time to buy a house. But, because spring and summer are traditionally seen as the best seasons for home shoppers, the housing market often cools in the months following its busiest season. Evidence of this can be found in Fannie Mae’s most recent Home Purchase Sentiment Index. The index – which asks Americans for their feelings about buying and selling homes, mortgage rates, home prices, etc. – reached an all-time high in September but saw a decline in October. In short, fewer Americans feel now is a good time to buy or sell a house. But that’s normal, according to Fannie Mae’s chief economist, Doug Duncan. “The modest decrease in October’s Home Purchase Sentiment Index is driven in large part by decreases in favorable views of the current home-buying and home-selling climates, a shift we expect at this time of year moving out of the summer home-buying season,” Duncan said. “Indicators of broader economic and personal financial sentiment remain relatively steady.” In other words, because Americans generally feel better about their economic security, the dip in sentiment is likely to be temporary. More here.

Builders Optimistic About 55+ New Home Market

First-time home buyers get a lot of attention, and for good reason. Historically speaking, they make up around 40 percent of all home sales. And though the share has been lower in recent years, the trend among younger buyers is an important indicator for the real estate market and, therefore, gets a lot of press. But older Americans buy homes too, of course. For that reason, the National Association of Home Builders takes a quarterly measure of the market for new homes among buyers 55 and older. According to the most recent results, builders are optimistic about sales among older buyers, though there was a decline from the previous quarter. Robert Dietz, NAHB’s chief economist, says the dip was due to recent natural disasters rather than decreasing confidence. “The decline in the 55+ Single-Family Housing Market Index is consistent with slight softening of other measures of single-family construction seen recently, driven by the effect of the natural disasters on top of ongoing issues with the supply of labor, lots and some building materials.” Dietz said. “However, market conditions on balance remain favorable, and we expect gradual continued growth in the 55+ housing sector.” More here.

Early Forecast Sees Housing Gains Next Year

This year’s real-estate market has been a mixed bag. On the one hand, demand from home buyers has been strong and an increasing number of renters say they hope to one day own a home. But though there has been strong demand from buyers, there has been a lack of homes available for sale in many markets. Low inventory has caused home prices to continuing rising and sales – though higher than the year before – to fall below expectations considering the level of demand from potential buyers. So what’s in store for next year? Well, Lawrence Yun, the National Association of Realtors’ chief economist, sees improvement. According to Yun, continued economic gains should lead to more home sales and more new home construction. However, because for-sale inventory will remain a concern, Yun is cautiously optimistic. “An overwhelming majority of renters want to own a home in the future and believe it is part of their American Dream,” Yun said. “Assuming there are no changes to the tax code that hurt homeownership, the gradually expanding economy and continued job creation should set the stage for a more meaningful increase in home sales in 2018.” More here.

How Will Homes Change As Americans Grow Older?

Ipsos, an independent market research company, recently gathered a panel of experts to weigh in on the future of housing. From climate concerns to home automation, the panel looked at what changes may be necessary in order for our homes to meet our needs in the future. One of the topics focused on the fact that Americans are growing older. In fact, by 2060, nearly 100 million Americans will be over the age of 65 and – if current numbers are any indication – the vast majority of them will prefer to stay in their own homes and communities as they age. According to Rodney Harrell, director of livable communities for AARP’s Public Policy Institute, the current housing stock may not be suited to the needs of an aging population. “The problem is you can’t create a new housing stock overnight, so we have to start working now,” Harrell said. “Nobody should be forced from their home because it doesn’t work for them.” How our homes adapt to our needs will depend, in part, on advancements in smart-home technology but also on how soon builders and home remodelers begin installing features that make it easier for the elderly to preserve their independence. More here.

Mortgage Rates Rise To Highest Point Since July

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, with increases seen across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increase was driven by economic speculation and a stronger global economy, according to Joel Kan, an MBA economist. “Rates increased last week as speculation over the next Fed chair continued, and the European Central Bank announced plans to taper its asset purchase program, signaling increased confidence in the euro zone economies,” Kan told CNBC. In short, as economic confidence rises, so will interest rates. Still, despite higher rates, demand for home purchase loans remains 10 percent higher than it was at the same time last year – though it did fall from one week earlier. Refinance activity was also down from the week before. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Where Do We Move When We Move Out Of State?

The United States is a big country and offers just about every type of climate and lifestyle imaginable. From urban to suburban, beach to mountaintop, there’s a lot to choose from if you’re someone looking to pack it up and move away from home. But which state you dream of, when you dream of moving away, really depends on where you currently live, it turns out. New research breaks down which state’s residents most want to move out of state and which destinations are most popular based on where they live. For example, Vermonters are most likely to want to leave home, with just over 24 percent of the residents looking to move. Among them, 14 percent wanted to move to Florida. North Dakotans, on the other hand, want to move to Minnesota most. Overall, Texans were the least likely to say they’d like to move out of state and the South was the region most popular with out-of-state movers overall. Not surprisingly, Florida was the top destination for a lot of Americans. The state was the most popular place to move among residents of 18 of the 50 states. However, more often than not, if residents weren’t hoping to move to Florida, their choice for out-of-state destination was a state neighboring the one closest to their current home. More here.

Single Women Make Up Nearly 20% Of Home Buyers

It’s no surprise that the most common type of home buyer is married couples. After all, taking on something as financially complex and long term as buying a home isn’t the type of thing you do with someone you just met. More surprising, though, is which demographic group comes in second to married couples among recent buyers. According to data from the National Association of Realtors’ 2017 Profile Of Home Buyers And Sellers, single women made up 18 percent of home buyers from mid-2016 through June of this year – the highest share since 2011. That more than doubles the number of single men buying homes, which actually falls below unmarried couples at just 7 percent. On top of that, single women tend to buy more expensive homes than single men, despite the fact that they earn less. So what’s behind the large number of single women becoming homeowners? Well, according to the NAR, “solid job prospects, higher incomes, and improving credit conditions” were among the factors driving a higher number of unmarried women toward homeownership.

Mortgage Rate Increase Hits Demand

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates moved up last week causing a decline in demand for mortgage applications. In fact, total mortgage application volume – which includes purchase and refinance applications – fell 4.6 percent, though the number of home buyers requesting applications for loans to buy homes remains 10 percent higher than last year at the same time. According to Joel Kan, an MBA economist, rates were responding to news about upcoming fiscal policy. “Rates increased late last week as the market responded to news of a Senate budget plan which may positively impact tax reform progress and more speculation around the future leadership of the Federal Reserve,” Kan told CNBC. Whatever the reason behind the increase, mortgage rates are now at their highest level since July – though they still remain well below what is considered historically normal. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.