property management Archives

Mortgage Rates Up From Week Before

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up last week, rising across all loan categories. Though rates remain low overall, they moved up slightly for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. Higher rates didn’t hold back buyer demand, though. In fact, demand for loans to buy homes rose 5 percent from the week before and is now 5 percent higher than at the same time last year. Joel Kan, MBA’s associate vice president of industry surveys and forecasting, told CNBC that the rebound may have more to do with the time of year than any other factor. “More prospective home buyers returned to the market after two weeks of decreases in purchase activity, which were possibly due to spring break season and Easter,” Kan said. The rise in purchase activity was balanced by a 5 percent drop in refinance activity, however, which likely fell due to the first mortgage rate increase following consecutive weeks of decline. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Home Prices Continue Upward Climb

Home prices are expected to match their 2006 high at some point later this year, according to CoreLogic’s chief economist, Frank Nothaft. Nothaft says prices were up in March and are now just 2.8 percent below their peak. “With a forecasted increase of almost 5 percent over the next 12 months, the index is expected to reach the previous peak during the second half of this year,” Nothaft says. In fact, prices have already surpassed their previous highs in nearly 20 percent of cities included in the index. So what’s fueling the increases? Well, it’s a combination of a stronger economy, population growth, low mortgage rates, and a lower-than-normal number of homes for sale in many markets. Together, they’ve created an environment where the supply of homes can’t keep up with the number of interested buyers. And, when there are more buyers than available homes, prices rise. Still, buyers shouldn’t be scared off. Mortgage rates remain low by historical standards and that, combined with a stronger job market, should help make conditions better for buyers. Also, as the sales season continues, more homeowners will put their homes up for sale, helping to balance the market and slow future price gains. More here.

Homeownership Outpaces Rental Households

The number of owner occupied households has been lower-than-normal for several years. Following the housing crash, homeownership took a hit and, for many years afterward, trailed behind rental households in terms of growth. In short, more people were choosing to rent and the overall homeownership rate began a decade long retreat from its all-time high set in 2004. But, though the homeownership rate fell, Americans still consistently expressed a desire to own their own home. That there was a large majority of people who said they wanted to buy but were holding off meant, one day, that pent-up demand would result in a spike in home buyers. Now, according to new numbers from the Census Bureau’s Homeownership and Vacancy Survey, owner occupied households grew faster than rental households for the first time in 11 years during the first quarter of this year. This is significant because it may signal that more Americans are finally realizing their dream and becoming homeowners. Though encouraging, however, the uptick had little effect on the overall homeownership rate, which was unchanged from the previous quarter and has been relatively flat for a while. More here.

What Does It Mean When A Home’s Sale Is Pending?

There are steps to buying a home. You don’t just find a house, make an offer, and move in as soon as it’s accepted. In fact, though having an offer accepted is a big step, it’s really just the first of the closing process. There are many things that need to be done before your accepted offer becomes a final sale. During this process, the house you’ve chosen is off the market but not officially sold. Until you’ve got keys to the house, it’s considered a pending sale or under contract. Pending sales are important because they can be a good indicator of where home sales are headed. Because of this, the National Association of Realtors keeps track each month of the number of homes that are under contract as a way of watching what’s ahead for the market. For example, the NAR’s most recent Pending Home Sales Index was virtually flat from the month before. Lawrence Yun, NAR’s chief economist, says the results show that low inventory may be holding home sales back. “Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” Yun said. In other words, what we can learn from how many pending sales there were in March is that buyers should be prepared to move fast this spring and sellers should expect to find favorable conditions. More here.

Is What’s Outside As Important As The Inside?

When it comes to buying a house, most people focus first on what’s going on inside the house. The size of the kitchen, the number of bedrooms, closets, storage, etc., are all top concerns. But, according to a recent survey from the National Association of Realtors, access to outdoor recreation is nearly as important to most home buyers. Respondents listed benefits such as better health, an appreciation of nature, and a greater sense of community among the reasons they believed it was important to be close to outdoor features. And it wasn’t a small number, either. There were large majorities that said outdoor recreation was either very or somewhat important to them. In fact, 56 percent of participants said it was very important and an additional 30 percent said it was somewhat important. Not surprisingly, there was a slight difference depending on where respondents lived. For example, in the West, 65 percent of those surveyed said outdoor recreation was very important to them, while just 51 percent felt the same way in the Midwest. Still, it’s clearly something to think about when searching for a home to buy – whether you’re buying a home by the water or just looking for something close to a neighborhood park. More here.

Home Sales Hit Fastest Pace In A Decade

New data from the National Association of Realtors shows sales of previously owned homes rose 4.4 percent in March and are now at their fastest pace since February 2007. Lawrence Yun, NAR’s chief economist, said the gains were led primarily by increases in the Northeast and Midwest but the overall results are encouraging. “The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” Yun said. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain.” According to Yun, as long as inventory continues to rise, so will sales. Last month, inventory was up nearly 6 percent but, despite the improvement, it still lags behind last year’s levels. And, because there are fewer properties for sale in many markets, homes are selling more quickly this spring. In fact, the typical home was on the market for just 34 days and nearly half of all homes sold in March were on the market for less than a month. More here.

Hopeful Outlook Forecasts A Spring Bump

The real estate market is constantly evolving. What is true one day may not be the next. For example, this past winter many forecasts for the upcoming spring season predicted buyers might be scared off by rising interest rates and a lack of homes for sale. However, now that spring has arrived, mortgage rates have come down a bit and the housing market has been among the strongest sectors of the economy. For example, Fannie Mae’s Economic & Strategic Research Group’s latest housing forecast notes both a stronger-than-usual February and the prospects for a good spring. “February fared better than other hard economic indicators partly due to the warm winter weather, and the ESR group expects that a seasonal uptick in listings going into the spring selling season will help alleviate extremely tight inventory,” the group’s latest release reads. In other words, despite higher rates and low inventory, the housing market performed well in February and trends going forward indicate conditions may be even more favorable now. As more homeowners put their homes up for sale, buyers will find improving conditions for a spring home search. More here.

Millennials Turn Traditional When It’s Time To Buy

Whenever the topic of millennial home buyers comes up, the assumption is that they’re all searching for urban lofts and using the latest tech to find them. In other words, the next generation of home buyers isn’t interested in the old way of doing things. However, survey after survey seems to contradict those assumptions. In fact, recent surveys have found millennials are far more traditional than most assume. For example, a recent survey of Americans between the ages of 18 and 34 found large majorities said they’d prefer to work with a local real-estate agent and lender as opposed to online services when searching for a house to buy. Doria Lavagnino, co-founder and president of CentSai, the company behind the survey, says younger buyers want the comfort and reassurance of a recommendation from someone they trust. “Buying a home for the first time is daunting, and working with a local agent – particularly an agent referred by a parent or friend – could provide peace of mind.” The survey also found a majority of respondents said they plan to buy in the next two years and – among those who said they don’t plan on buying – nearly 70 percent said it’s because they can’t afford to, rather than because they prefer to rent. More here.

What Rising Optimism Means For Real Estate

According to the Survey of Consumers conducted by the University of Michigan, Americans are feeling more optimistic about economic conditions. In fact, Richard Curtin, Survey of Consumers chief economist, says optimism is at its highest point since 2000. “The Current Economic Conditions Index rose to its highest level since 2000 and nearly reached its all-time peak of 121.1 set in 1999,” Curtin said in the most recent release. So how will all that optimism affect the housing market this year? A lot depends on builders and current homeowners. So far this year, buyer demand has been high and the number of homes available for sale has been lower than usual. As economic confidence builds, however, builders may start building more new homes to meet the growing demand. Current homeowners could also decide that it’s a great time to sell a house and put their home up for sale. If this happens and inventory begins to climb, the market will become more balanced, prices will begin to moderate, and home sales will increase. In other words, as long as Americans are feeling confident about their financial situation, there’s a good chance they’ll be thinking about a move. More here.

What Home Buyers Want Most This Spring

Home buyers, through the years, tend to value the same things. It makes sense. Though styles may vary and specific preferences may change, at the end of the day, we all want the same things out of our homes. Generally speaking, it all comes down to storage, space, and a sense of security. This year is no different. For example, a newly released survey of hopeful spring home buyers found that privacy was the top goal cited when asked what they valued most. Privacy even beat out family needs, which came in a close second. As for storage and space, garages and backyards were also near the top of the priorities list for most buyers. Demographically, younger buyers were more likely to want a large yard, while garages were particularly popular with buyers over the age of 55. Either way, it’s clear that this year’s house hunters have common needs. There is one need, however, that buyers share more than any other. When asked which room was most important to them, 80 percent of respondents named the kitchen. For obvious reasons, the kitchen is consistently ranked high atop buyers’ wish lists. After all, no matter how young or old a buyer is, they need to eat – which is why a good kitchen is always a draw for home shoppers. More here.