Archive for February 2015

Builders Confident Despite Slow February

Because builders have an unique perspective on the market for newly built single-family homes, their outlook is a valued measure of the housing market’s health. For example, the National Association of Home Builders Housing Market Index is a widely followed survey of home builders that scores their responses on a scale where any number above 50 means more builders view conditions as good than poor. In February, the index fell two points to 55. Despite the month-over-month dip, however, the index has remained in the mid-to-high 50s for eight consecutive months. David Crowe, the NAHB’s chief economist, says that’s consistent with a modest but ongoing recovery. “Solid job growth, affordable home prices, and historically low mortgage rates should help unleash growing pent-up demand and keep the housing market moving forward in the year ahead,” Crowe said. Of the components measuring current buyer traffic, sales conditions, and outlook for the next six months, two of the three experienced losses in February. Buyer traffic posted the largest decline, posting a five point slide likely caused by harsh winter weather in much of the country. On the other hand, both current sales conditions and outlook for the next six months were relatively flat and remain above 60. More here.

Boomeranging Millennials To Become Future Buyers

According to new research from the National Association of Home Builders, 90 percent of young Americans born between 1980 and 1984 moved out of their parents’ home before the age of 27. Half of them, however, eventually moved back in with their parents. This phenomenon, known as “boomeranging,” runs counter to the historical trend and means many Millennials aren’t taking the typical path to homeownership that previous generations followed. Combined with the fact that most of these same young adults express a desire to one day own their own home, this trend could indicate that – though the number of first-time buyers active in the market has lagged in recent years – there is a significant amount of pent-up demand that, when released, will propel the housing market forward. In other words, there is reason to believe many young Americans will become home buyers in the near future. David Crowe, NAHB’s chief economist, said understanding the makeup of those who return to their parents’ home could shed light on when that might happen. “The data may indicate that while this age group is delaying what we think of as typical milestones, the combination of resources and education and what we have found about their preferences suggests growing housing demand in the years ahead,” Crowe said. More here.

Can You Trust The Home Price Estimates You Found Online?

These days, there’s no shortage of information a prospective home buyer or seller can find online about their local real-estate market. More so than ever before, an owner or buyer can locate all sorts of details and data on a particular property with just the click of a mouse. But when it comes time to buy or sell your home, how much of the info you found online can you trust to be accurate and usable at the closing table? Should you expect the home price estimate you found on the Internet to be fairly close to the final price tag? Well, according to a recent report in the Los Angeles Times, it may be a good starting off point but there is often a big difference between the home price estimate you see on a real-estate website like Zillow and the one you’ll get from a Realtor or professional appraiser. Though they may be useful to get an idea of the general value of a house or homes in a particular neighborhood, online price estimates can have a median error rate of 8 percent or more in some cases. In other words, rely on the professionals you’re working with to provide you with the most accurate and up-to-date information about home prices in your area. More here.

Average Mortgage Rates Up In Latest Survey

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates increased slightly last week, though they remain near historic lows. Rates rose across all loan categories, including 30-year fixed-rate loans with conforming and jumbo balances, mortgages backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increase follows the previous week’s decline, which brought rates to their lowest level since May 2013. In recent weeks, average mortgage rates have been trending downward, causing a spike in refinance activity. With last week’s rate increase, however, the MBA’s Refinance Index dropped 10 percent from the week before and the refinance share of total mortgage activity fell to 69 percent from 71 percent the previous week. Purchase activity also fell, slipping 7 percent from one week earlier, though it remains 1 percent above year-before levels on an unadjusted basis. The MBA’s weekly survey covers 75 percent of all retail residential mortgage applications and has been conducted since 1990. More here.

Real Estate Pros Forecast A Sunny Spring

The National Association of Realtors’ Realtor Confidence Index measures how real estate professionals perceive the market for single-family homes on a scale where any number above 50 indicates more Realtors feel the market will be strong over the next six months than those that feel it will be weak. In December, the index increased to 67 from 60 the month before. The spike follows a series of positive economic and housing reports at the end of last year. In this case, the spring selling season – which is typically the busiest time of the year for home buyers and sellers – may be one reason for the increasing optimism. However, job market gains, declining mortgage rates, and new programs offering buyers reduced monthly mortgage insurance premiums and lower down payment requirements are also responsible for the brighter outlook. In recent months, housing market sentiment overall has been on the rise among both professionals, such as home builders and real estate agents, and consumers. Boosted optimism about Americans’ personal financial situation and the real estate market have many analysts and insiders forecasting a good upcoming spring season. More here

Number Of Americans Who Plan To Buy Rises

The number of Americans who say they plan on buying a home is on the rise, according to the most recent results of Fannie Mae’s monthly National Housing Survey. In fact, 66 percent of respondents said they plan on buying a house the next time they move, compared to just 29 percent of participants who said they’d prefer to rent. Doug Duncan, Fannie Mae’s chief economist, said consumers are as optimistic about their personal financial situation as they have been at any time since the survey began in 2010. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up,” Duncan said. “Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery.” Also among the results, the number of Americans who said they feel it is a good time to sell a house tied an all-time survey high of 44 percent and the number who said it is a good time to buy a house increased to 67 percent. More here.

Improved Job Market Key To Housing Health

Five housing analysts interviewed by RealtyTrac about the market in 2015 expressed optimism about home sales, prices, mortgage rates, and credit availability this year. But, despite their optimistic outlooks, three of the five said the expected improvement was contingent upon further job market gains. For example, Mark Zandi, of Moody’s Analytics, said new and existing home sales are expected to rise as much as 20 percent this year but continued labor market improvement is key. Trulia’s Jed Kolko agrees, adding that young people getting jobs and forming households would be the strongest source of housing demand in the coming year. Kolko, however, believes many of these young Americans will be moving into rental properties while they save for a down payment on a house. On the other hand, Realtor.com’s Jonathan Smoke feels that new lower down payment requirements announced by Fannie Mae and Freddie Mac should allow more first-time buyers to purchase homes, despite their limited assets. The job market was also key to Lawrence Yun’s forecast. Yun, the National Association of Realtors’ chief economist, believes employment gains will drive housing this year but also feels there will be more buyers bouncing back from distressed property sales and re-entering the market this year. More here.

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