When builders feel confident that there are a lot of buyers looking for new homes, they build more homes. It’s simple, really. It’s also good for the housing market, as more new homes help provide choices and keep prices from spiking. That’s why the National Association of Home Builders tracks builder confidence each month. In October, their survey found builders optimistic about the market for newly-built homes and confident that buyer demand will remain high. “Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” Randy Noel, NAHB’s chairman, said. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.” Among the survey’s three components – scored on a scale where any number above 50 indicates more builders view conditions as good than poor – current sales conditions rose a point to 74 and expectations for the next six months increased to 75. The results are an encouraging sign that new home inventory will improve and help bring more balance to the market, which is good news for buyers. More here.
Archive for October 2018
Fewer Home Buyers Making Offers Sight Unseen
No one wants to make big decisions hastily. It’s a great way to make mistakes and end up with regrets. Which is why, in an ideal situation, home buyers would have time to consider the pros and cons of multiple houses and choose the one that best fits their needs and wishlist. Unfortunately, in a competitive market, that’s not always possible. And so, buyers have to be prepared and ready to make an offer when they see a house they like. The good news is, now that inventory is beginning to rise and houses are staying on the market longer, home buyers have more time to weigh their decision. In fact, according to a recent survey, the number of buyers who made an offer on a house without seeing it first has fallen 15 percent since late last year. This is a good indication that buyers are feeling some relief and aren’t feeling pressured to move as quickly as they were when inventory was tighter. But though this is encouraging news for potential buyers, it doesn’t mean the market isn’t competitive. If you’re interested in purchasing a home any time soon, it’s still best to do your homework, be prepared, prequalified, and ready to make an offer when you find a house you like. More here.
Most Homeowners Say They Love Their House
Sometimes picking a house to buy can cause anxiety. After all, what if you choose the wrong one and aren’t happy living there? What if there are structural or mechanical issues that go undetected and will end up meaning costly renovations? It’s hard to imagine that you could possibly cover all the potential issues in just a few walkthroughs. And so, it’s natural to worry about buyer’s remorse. But, according to a new survey, you might be worrying yourself unnecessarily. That’s because, the results show an overwhelming majority of respondents said they love their current home. In fact, 83 percent of participants said they were happy in their house. To some degree, the responses fell along demographic lines, with people 55 years or older and retirees being the most likely groups to say they love their home and have no plans to move. Respondents between 18 and 34 were more likely to want to move. There were also regional differences. For example, residents in Boston and Detroit were more likely to say they like their current home and would rather renovate than move, while the survey found Los Angeles residents were the most likely to say they’d prefer a new house. More here.
Prices Cuts Rising But Only In Some Neighborhoods
Home prices have been increasing for awhile. But their consistent upward climb is starting to slow, according to new data. In fact, a recent analysis has found the number of home sellers who have reduced their listing price is up from where it was last year. The research shows 17.2 percent of homes for sale reduced their price in August, up from 16.7 percent last year at the same time. That’s encouraging news for hopeful home buyers who have been keeping an eye on affordability conditions. But, though price reductions are at their highest level since 2014, that doesn’t mean every neighborhood is part of the trend. For example, in this case, there are more reductions seen at the higher end of the housing market than in more affordable price brackets. That means, while you may be able to find a better deal in a pricier neighborhood, you may not have as much luck in the more affordable locations popular with entry-level and first-time buyers. That’s why potential home buyers should do some research on their preferred neighborhoods and get an idea of where they’ll be able to get the best deal. More here.
Loans To Buy Homes Up 2% From Last Year
According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were up across all loan categories last week, including 30-year fixed-rate mortgages with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The increase follows an upward trend that has been driven by economic improvement and a stronger job market. “Rates moved higher last week, driven by strong data on the job market, indicating that the Fed will continue to raise rates,” Joel Kan, an MBA economist, told CNBC. But despite higher rates and a weekly drop in application demand, requests for loans to buy homes is still up over last year, when rates were lower. In fact, the MBA’s Purchase Index is now 2 percent higher than it was a year ago. The improvement, though slight, is a good indication that demand for homes remains strong, even while rates move higher. The MBA’s weekly survey covers 75 percent of all retail residential mortgage applications and has been conducted since 1990. More here.
Economy Has Americans Thinking About Buying
Deciding to buy a house is mainly a money decision. You either feel secure enough financially to make a move or you don’t. This helps explain the current real estate market. After all, survey after survey shows Americans think home prices and mortgage rates are moving higher and making it less affordable to buy. And yet, home buying demand remains high. Why? Well, mostly because, at the same time, people also feel more secure in their jobs and money due to a stronger economy and job market. Take Fannie Mae’s most recent Home Purchase Sentiment Index as an example. The survey found a rising number of respondents who said it was a good time to buy a home, despite increasing numbers who also say they believe mortgage rates and prices will continue to rise. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the economy explains it. “Downside risk to housing is limited by broader economic strength, which helped boost perceptions of current home buying conditions,” Duncan said. “For consumers who say now is a good time to buy, the share citing overall economic conditions as a reason rose to a survey high.” More here.
Number Of Homes For Sale Sees Biggest Gain Since 2013
Affordability is always a top concern for people thinking about buying a house. Of course, there are other factors that are important when deciding whether or not to move. But what you can or can’t afford may be the biggest. After all, if you don’t have enough for a down payment or couldn’t keep up with the mortgage on a new place, it doesn’t really matter how close to the office it is or in what school district. That’s why a new report from the National Association of Realtors’ consumer website is good news for prospective home buyers. The report shows that the number of homes for sale saw it’s largest year-over-year gain in five years. Why’s this important? Well, in today’s market, the rate of home price increases is being driven by the fact that there are too few homes for sale. In other words, since there are more buyers than homes, sellers can demand a higher price. But as more homes become available, buyers will have more choices and price increases will begin to slow. The fact that inventory is up 8 percent over the year before and showing signs of additional gains means there may be relief on the way for buyers worried that they won’t be able to find a home they like or one in their price range. More here.
Green Features Add Value To Homes
In order for a home to be considered truly green, there are six elements it needs to contain, according to the Appraisal Institute, a professional association of real estate appraisers. These include water efficiency, energy efficiency, indoor air quality, materials, and operations and maintenance. Put simply, to retrofit a home to meet those standards would require a lot of work. But that doesn’t mean you can’t improve your home’s performance through smaller measures. And Appraisal Institute president, James L. Murrett, says, if you do, you’ll not only be able to lower your bills but you may also be able to sell your house for more when the time comes. “The latest research shows that green and energy-efficient home improvements have the potential to pay dividends for buyers and sellers,” Murrett says. “However, it depends on the improvements made. Some green renovations, such as adding Energy Star appliances and extra insulation, are likely to pay the homeowner back in lowered utility bills relatively quickly.” Whether you’re searching for a home to buy or thinking about selling one, a home’s efficiency and performance is an important factor to consider. More here.
Higher Mortgage Rates Shouldn’t Sway Home Buyers
If you’re someone who’s been thinking about buying a house, you’ve likely kept your eye on mortgage rates and home prices. Those are the two most watched affordability factors and, since both have risen over the past year, prospective home buyers have good reason to pay attention to which way they’re heading. Home prices are still headed upward in most markets, though they’re moving at a slower rate. And, according to the Mortgage Bankers Association’s Weekly Applications Survey – which covers 75 percent of all retail residential mortgage applications – there’s some good news about mortgage rates too. That’s because rates were virtually unchanged last week and long-term rates remain steady. “Short term rates have been increasing but long term rates have held steady, which should not pose too much of a headwind to home purchase activity, especially given the potential demand from demographic factors,” Joel Kan, an MBA economist, told CNBC. In short, though rates are higher than they were last year at this time, they are still historically low. Which means, unless conditions change, they shouldn’t have much impact on home buyers’ plans in the near future. More here.
Which Cities Have The Country’s Biggest Houses?
When looking for a house to buy, you aren’t necessarily always looking for the biggest house. After all, the size of the home you choose will be determined, in part, by things like the size of your family, storage needs, how many bathrooms and bedrooms, etc. Mostly, though, it’ll be determined by your budget. Because, when it comes down to it, we all would like a little more space. For that reason, a recent study looked at the largest 45 cities in the country and calculated the median home size and cost per square foot, in an effort to figure out which cities have the biggest homes and which give buyers the most space for the best price. The results show that the South has the biggest homes, with three of the top five cities located in Texas. In fact, Houston was the city with the largest median home size at 1,952 square feet, with Atlanta, Washington DC, Dallas, and Austin rounding out the top five. Southern cities also tend to have a lower price per square foot. For example, while Houston has the biggest homes, the median price per square foot was $100. By comparison, cities like San Francisco, Boston, and Denver have smaller homes but higher prices, mostly due to the fact that the housing stock in those areas is older. More here.
