Category: Real Estate

Homeownership Rate Rebounds from 50-Year Low | Realtor Magazine

The U.S. homeownership rate may have finally bottomed out, as the share of Americans who own homes is steadily climbing. The ownership rate posted an increase in the second quarter, reversing a sharp downward trend that begun in the Great Recession.

The homeownership rate was 63.7 percent in the second quarter, the U.S. Census Bureau reported Thursday. That marks nearly a full percentage point increase from a year ago.

Last year, the homeownership rate had plunged to a 50-year low of 62.9 percent. 

“The addition of 1.2 million households being homeowners is clearly good news, as more households are participating in housing equity gains,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “But let’s keep it in perspective: There are fewer homeowners today compared to a decade ago, while renter households have risen by 8 million. So it is still the case that the massive $7 trillion in housing wealth gains from the cyclical low point has been accumulated by a fewer number of families in America. Further advances in homeownership are required to strengthen and broaden the middle class.”

30-Year Rates Are Hovering Below 4% | Realtor Magazine

Mortgage rates posted another drop this week, offering more relief to home buyers.

Freddie Mac reports the following national averages with mortgage rates for the week ending July 27:

• 30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.5 point, falling from last week’s 3.96 percent average. Last year at this time, 30-year rates averaged 3.48 percent.
• 15-year fixed-rate mortgages: averaged 3.20 percent, with an average 0.5 point, dropping from last week’s 3.23 percent average. A year ago, 15-year rates averaged 2.78 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 3.18 percent, with an average 0.5 point, down from last week’s 3.21 percent average. A year ago, 5-year ARMs averaged 2.78 percent.

New-Home Sales Are High, But They Could Be Higher | Realtor Magazine

 

 

New-home sales inched up 0.8 percent in June, but sales would be higher if there were more new homes to sell. Sales of newly built single-family homes reached a seasonally adjusted annual rate of 610,000 units in June, according to a joint report released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

“While new home inventory rose slightly in June, it remains tight as builders face lot and labor shortages and increases in building material costs,” says Michael Neal, senior economist at the National Association of Home Builders.

Existing-Home Sales Report: Home Sales Dip as Buyers Get ‘Tripped Up’

The lower price ranges are seeing some of the tightest inventory supply. Only about 2,000 new homes under $150,000 were sold in June, according to the report. About 6,000 homes were sold in the $150,000 to $199,999 price range. There was an uptick in the $200,000 to $299,000 price range at about 19,000 new homes sold in June, which is up from 15,000 a year ago.

The greatest number of new homes were sold in the South in June.

But the most sales on the rise last month were in the West. New-home sales rose in June by 12.5 percent month over month in the West and by 10 percent in the Midwest. Sales were unchanged in the Northeast in June, and dropped by 6.1 percent in the South, according to the Census and HUD report.  

New homes remain significantly pricier than existing homes. New home buyers likely will pay about 17.8 percent more than if they purchased a previously lived-in home.

This rings true even though new-home prices did slow down last month. The median price of a newly built home dropped nearly 4.2 percent in June month over month to $310,800. Prices are down nearly 3.4 percent from a year ago. Meanwhile, the median existing home price reached a record in June at $263,800.

Despite June’s modest new-home sales gain, sales overall remain up nearly 11 percent since the beginning of 2017, according to the NAHB.

New-home sales inched up 0.8 percent in June, but sales would be higher if there were more new homes to sell. Sales of newly built single-family homes reached a seasonally adjusted annual rate of 610,000 units in June, according to a joint report released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

“While new home inventory rose slightly in June, it remains tight as builders face lot and labor shortages and increases in building material costs,” says Michael Neal, senior economist at the National Association of Home Builders.

Existing-Home Sales Report: Home Sales Dip as Buyers Get ‘Tripped Up’

The lower price ranges are seeing some of the tightest inventory supply. Only about 2,000 new homes under $150,000 were sold in June, according to the report. About 6,000 homes were sold in the $150,000 to $199,999 price range. There was an uptick in the $200,000 to $299,000 price range at about 19,000 new homes sold in June, which is up from 15,000 a year ago.

The greatest number of new homes were sold in the South in June.

But the most sales on the rise last month were in the West. New-home sales rose in June by 12.5 percent month over month in the West and by 10 percent in the Midwest. Sales were unchanged in the Northeast in June, and dropped by 6.1 percent in the South, according to the Census and HUD report.  

New homes remain significantly pricier than existing homes. New home buyers likely will pay about 17.8 percent more than if they purchased a previously lived-in home.

This rings true even though new-home prices did slow down last month. The median price of a newly built home dropped nearly 4.2 percent in June month over month to $310,800. Prices are down nearly 3.4 percent from a year ago. Meanwhile, the median existing home price reached a record in June at $263,800.

Despite June’s modest new-home sales gain, sales overall remain up nearly 11 percent since the beginning of 2017, according to the NAHB.

Rent vs. Own? The Best Option in Each State | Realtor Magazine

Home prices may be on the rise across the country, but you’re still better off buying a home in most states in the U.S. than renting one. Consumers in only 11 states will find renting more affordable than buying a home, according to a new study by GOBankingRates, a personal finance website. 

GOBankingRates analyzed the cost of renting versus owning a home in all 50 states and the District of Columbia. Researchers looked at estimated rent prices for all homes listed on a real estate website. It then calculated the estimated monthly mortgage to own a home in each state, based on the median list price of homes, a 20 percent down payment, and a 30-year fixed-rate loan.

Home prices may be on the rise across the country, but you’re still better off buying a home in most states in the U.S. than renting one. Consumers in only 11 states will find renting more affordable than buying a home, according to a new study by GOBankingRates, a personal finance website. 

GOBankingRates analyzed the cost of renting versus owning a home in all 50 states and the District of Columbia. Researchers looked at estimated rent prices for all homes listed on a real estate website. It then calculated the estimated monthly mortgage to own a home in each state, based on the median list price of homes, a 20 percent down payment, and a 30-year fixed-rate loan.

Bay Area real estate: Pending home sales fall across region

Amid the continuing housing crunch, pending home sales dropped across the Bay Area last month.

A California Association of Realtors report shows pending sales fell 0.6 percent throughout the region in June, compared with the same month a year earlier. Pending sales fell 10.4 percent in San Mateo County and 0.4 percent in Santa Clara County.

 

“Last week in Santa Clara County, we stood at roughly 35 percent fewer listings than we did last year at the same time,” said Chris Trapani, founder and CEO of the Sereno Group. “You look at that and say, `What is there even to sell?’ The fact that Santa Clara is off only one percent or less in units sold — that’s actually kind of remarkable, I think.”

Craig Gorman, past president of the Santa Clara County Association of Realtors, agreed: “The biggest reason why sales are down is because there’s just not enough inventory.”

For the week of July 10, he said, only 1,091 homes were on the market in the county.

“They’re still popping off the shelves if they’re priced right,” Gorman said.

San Francisco County bounced back from a double-digit decline in pending sales in May, and rose 22.2 percent in June.

To the north of the Bay Area, pending sales were down 6.5 percent in Sacramento.

To the south, they fell 15.7 percent in Santa Cruz.

Statewide, pending home sales slipped for the sixth month in a row, down 0.9 percent.

Region by region, however, the picture was more varied. Southern California sales were up 2.5 percent, and Central Valley sales rose 5.2 percent.

Buyers Accept ‘Extreme Commutes’ for Affordability | Realtor Magazine

Some buyers are willing to accept an “extreme commute”—a minimum of two hours each way between work and home—in return for the tranquility of the outer ’burbs, a larger property, and more land at a lower price than the city. As The New York Times puts it, these buyers are following an old real estate adage: “Drive until you qualify.”

“Technological changes have made it more possible to redefine the workplace,” says Mitchell L. Moss, director of the Rudin Center for Transportation at New York University. “Even in New York City, which has been famous for not allowing people to work at home, there is now more tolerance of flexible time.”

Data is sparse on how many people embark on an extreme commute. The U.S. Census Bureau, which defines a “long commute” as 60 miles each way, reported in 2013 that 21 percent of commuters spent 60 minutes or longer traveling to work. New York State, at about 16 percent, had the highest rate of long commuters, followed by Maryland and New Jersey, both at about 15 percent.

Meig Walz with Coldwell Banker in Madison, Conn., told the Times that she is seeing more extreme commuters from New York. Madison is about 15 minutes east of New Haven, Conn., and halfway between New York and Boston. It can take more than two hours each way.

“We are now getting more middle- and upper-level executives with young families looking for prime waterfront property,” Walz said. Buyers are purchasing four- and five-bedroom waterfront homes in Madison for about $2 million, which is half of what they would pay in Fairfield County. They also get lower taxes in Madison.

Are Builders Warming Up to Smaller Homes? | Realtor Magazine

Competition is heating up among millennials and baby boomers for smaller, more affordable homes. But builders have been slow to meet demand. That may be showing signs of changing.

Home sizes are beginning to shrink, which may also help prices edge down, too.

“We are starting to see [smaller] starter homes come back,” says Rick Palacios Jr., director of research at John Burns Real Estate Consulting.

The uptick started slightly in mid-2016 as employment and wages rose.

More buyers are “now in that life stage of their early 30s [where] they’ve got a good job now, they’re getting married, they’re having kids,” Palacios says.

Some builders are heading farther from cities, where land is cheaper. Or they may construct more homes on smaller lots or build a line of attached townhouses.

“A builder can’t pay through the nose for land and then build a starter home on that land,” Palacios says. “It just doesn’t pencil out for them. [We’ve] started to see more builders gaining confidence in building lower-priced, smaller homes.”

Nearly 29 percent of the homes built between 2010 and 2015 were 3,000 square feet or more—hardly small by any standards. More builders focused on the high end of the market following the recession and built fewer smaller homes. Census data shows that 14.72 percent of new homes in the 1990s were between 1,000 and 1,499 square feet. Between 2010 to 2015, that percentage shrunk to 9.75 percent.

Robert Dietz, chief economist at the National Association of Home Builders, projects about 850,000 new homes will be constructed this year, even though the market could really support about 1.2 million new homes.

An uptick in smaller homes is “not something that can be fixed overnight,” he notes. “It’s going to take a while.”

After Brief Hike, Mortgage Rates Fall Below 4% | Realtor Magazine

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week. 

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield fell 5 basis points this week. The 30-year mortgage rate moved with Treasury yields, dropping 7 basis points to 3.96 percent.”

Freddie Mac reported the following national averages with mortgage rates for the week ending July 20: 

• 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent. 
• 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent. 
• 5-year hybrid adjustable-rate mortgages: averaged 3.21 percent, with an average 0.5 point, dropping from last week’s 3.28 percent average. A year ago, 5-year ARMs averaged 2.78 percent. 

Source: Freddie Mac

Following two weeks of rate increases, the 30-year fixed-rate mortgage settled back below a 4 percent average this week. 

“Continued economic uncertainty and weak inflation data pushed rates lower this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield fell 5 basis points this week. The 30-year mortgage rate moved with Treasury yields, dropping 7 basis points to 3.96 percent.”

Freddie Mac reported the following national averages with mortgage rates for the week ending July 20: 

• 30-year fixed-rate mortgages: averaged 3.96 percent, with an average 0.6 point, dropping from last week’s 4.03 percent average. Last year at this time, 30-year rates averaged 3.45 percent. 
• 15-year fixed-rate mortgages: averaged 3.23 percent, with an average 0.5 point, falling from last week’s 3.29 percent average. A year ago, 15-year mortgage rates averaged 2.75 percent. 
• 5-year hybrid adjustable-rate mortgages: averaged 3.21 percent, with an average 0.5 point, dropping from last week’s 3.28 percent average. A year ago, 5-year ARMs averaged 2.78 percent. 

Source: Freddie Mac

Freddie Mac: Housing Is Still Affordable | Realtor Magazine

Housing affordability is the talk of the town in the current real estate climate. Home prices surpassed their peak at the end of the last housing boom. Since 2012, prices have increased, on average, 6 percent per year. However, per capita incomes have risen only 2.4 percent, on average, per year, according to Freddie Mac’s latest Insight report for July.

In areas like Marin, San Francisco, and San Mateo counties, the median-income household is unable to qualify for a mortgage to purchase a median-priced home in any ZIP code within those three counties.

The limited number of homes for sale has increased the perception that homes are unaffordable, according to Freddie Mac’s report. But consumers may be surprised to find that homes are still more affordable than they may seem. 

“Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices,” says Sean Becketti, Freddie Mac’s chief economist. “Nevertheless, hurdles to homeownership arise from the difficulty of finding a house. The supply of homes for sale is very tight, especially starter homes.” 

Underwriting requirements are also more rigorous than they have been in the past, Becketti says.

“Many potential first-time borrowers are stymied by variable employment and income histories and the challenge of accumulating a down payment while simultaneously paying down their student loans,” Becketti says. “In fact, a high level of household debt, particularly student debt, poses perhaps the largest obstacle to first-time homebuyers.”

Borrowers Are in a Rush as Mortgage Apps Soar | Realtor Magazine

Threats of rising mortgage rates may have spooked borrowers last week and prompted them to quickly lock in rates. Total mortgage application volume for refinancings and home purchases jumped 6.3 percent last week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday.

Even though mortgage rates remained steady during the week, refinance volume, which had been dropping in recent weeks, surged 13 percent last week.

The 30-year fixed-rate mortgage averaged 4.22 percent last week, unchanged from the previous week, the MBA reports.

“Treasury yields were slightly lower last week as testimony from [Fed Chair Janet] Yellen was perceived to be more dovish than expected and as the market received data signaling weaker inflation and retail sales for June,” says MBA economist Joel Kan. “These factors kept the 30-year fixed-contract rate flat over the week.”

Mortgage applications for home purchases rose just 1 percent last week compared to the week prior. Applications for home purchases are 7 percent higher than a year ago, the MBA reports.

“It could just as easily be some seasonal adjustment distortion, loosening of underwriting standards, or nice weather sparking home improvement goals,” Matthew Graham, chief operating officer of Mortgage News Daily, told CNBC.