Finding the perfect home can be tough, especially if there aren’t many homes for sale. That’s why inventory is such a hot topic these days. There’s been a shortage of available homes over the past few years and it’s made buying a house more difficult, especially in the lower price ranges. However, recent numbers from Zillow show that conditions are beginning to swing back in favor of home buyers. Inventory has been rising, and at a good pace in the markets that need it most. In fact, in some of the nation’s most competitive markets like San Jose, Seattle, Denver, Los Angeles, and San Diego, the number of homes for sale has seen double-digit increases year-over-year. This is undoubtedly good news for home shoppers, as it gives them more options and therefore better chances at finding the right house. However, because the previous years’ inventory declines were significant, it’ll take some time to reverse those losses. Home buyers can still expect a competitive market this year, though it’s finally trending in their direction. More here.
Homeowners who sold a house in 2018 saw an average gain since purchase of $61,000, according to new numbers from ATTOM Data Solutions. ATTOM’s Year-End 2018 U.S. Home Sales Report found that home sellers averaged a 32.6 percent return on investment when comparing the price their home sold for with the original purchase price. The improvement was an $11,000 increase from the year before. While that’s good news for anyone selling a home, ATTOM’s chief product officer, Todd Teta, says changes may be on the way. The economy is still going strong and home loan rates remain historically low, Teta said. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019. Though market conditions are beginning to change, home prices are still expected to rise this year. With home seller profits at a 12-year high, that means it’s still a good time to sell a house. More here.
Here’s some good advice from Freddie Mac on how to search for a home. Don’t forget to do your “homework” – make sure you research the neighborhood, and think about what kind of house you want to live in for the long-term. For example, you might want to be closer to your favorite shops now, but several years down the road you might prefer to be closer to your kid’s school. http://www.freddiemac.com/blog/homeownership/20181218_do_your_homework.page
While real estate is slowing down nationally, there are still many markets out there that are heating up. Housing is highly dependent on location, and in these locations across the country, price is appreciating. This could make them a good investment in the long run. https://www.realtor.com/news/trends/2019-housing-markets-poised-to-take-off/
A new report from HousingWire shows that homeownership among Americans between the ages of 28 and 31 jumped from 27 percent to 47 percent just two years. Home buying has surged among younger Americans, and that’s an encouraging sign for the housing market – especially since homeownership levels haven’t yet fully recovered from the housing crash. However, that’s not the whole story. Increasing demand from first-time home buyers could also put pressure on home prices if available inventory can’t keep up with the level of demand. Millennials are expected to buy 10 million homes over the next decade, and they will be competing with each other. The balance between new home buyers and new homes will be a key component of the real estate market. If supply continues to lag behind, home prices will keep rising, which will build equity among current homeowners. However, that could cause affordability issues for aspiring homeowners. On the other hand, if supply increases, prices should moderate and lead to booming home sales. Either way, first-time home buyers will have a significant effect on the housing market in the coming years. https://www.housingwire.com/articles/47785-this-is-where-millennials-are-buying-the-most-homes?utm_source=AKZO+Media+Subscribers&utm_campaign=6929038aa7-EMAIL_CAMPAIGN_2018_12_27_07_54&utm_medium=email&utm_term=0_134f701abc-6929038aa7-276542805
Though rent is up about 3 percent from last year, it isn’t increasing quite as rapidly as it was before. There may be evidence that the slowdown is helping aspiring first time home buyers to save money for a house – especially millennials, who make up half of all renters. For one, the number of renters is falling. In fact, there were 43.2 million renter households across the country in 2018, which is about 100,000 fewer than in 2017. Combine that with the fact that millennials are currently buying more homes than any other generation, and it appears that slower rent appreciation may be helping more renters make the leap to homeownership. However, the renter’s market isn’t the same across all locations. For example, the New York metro area has seen rent rise just one percent over the past year, while in Las Vegas rent is up almost seven percent year-over-year. Still, if the overall trend holds, conditions may be getting easier for renters who hope to buy a home in the near future. https://www.prnewswire.com/news-releases/us-renters-spent-504-billion-on-housing-in-2018-300770096.html?utm_source=AKZO+Media+Subscribers&utm_campaign=0d06134231-EMAIL_CAMPAIGN_2018_12_21_07_27&utm_medium=email&utm_term=0_134f701abc-0d06134231-276542805
A recent survey by Zillow asked real estate economists and experts for their predictions on the housing market. While they had varied views on topics like mortgage rates and home values, they strongly agreed on homeownership rates. The vast majority of respondents – 88 percent – said that they expect the homeownership rate to increase in the next five years. 84 percent said it will be improved in just two years. In addition, almost half of the panelists said that first-time home buyers would be more active. Less than a quarter predicted a decrease in first-time home buyer activity and the rest predicted no change. On the other hand, respondents were much more split when it came to home buying activity from repeat home buyers. One quarter of respondents said it would increase, another quarter said it would decrease, and the remaining half said that it wouldn’t change. In short, first-time homebuyers are becoming more involved in the housing market than they used to. Homeownership rate had dropped during the recession. Since then, it has started to rebound, as a stronger economy is helping first-time buyers to afford homes. https://www.prnewswire.com/news-releases/interest-rates-more-severely-impacting-home-values-but-not-first-time-buyers-according-to-experts-300776068.html?utm_source=AKZO+Media+Subscribers&utm_campaign=2ab3783f29-EMAIL_CAMPAIGN_2019_01_10_09_16&utm_medium=email&utm_term=0_134f701abc-2ab3783f29-276542805
According to new numbers from First American, the length of time the average homeowner spends in their house is growing. In fact, it’s risen 10 percent in just the past year. Mark Fleming, First American’s chief economist, says there are a couple of reasons for this. “Just prior to the housing downturn in 2007, homeowners typically stayed in their homes for four years,” Fleming says. “In the aftermath of the housing market crash (2008-2016), median homeowner tenure increased to approximately seven years. Many people remained in their homes because their mortgage balances exceeded their property values during this time, so they would have lost money by selling their homes.” In the ensuing years, Americans who bought homes did so at a time when mortgage rates were at historic lows, giving them a reason to stay put longer. Combined, those factors pushed median tenure length to 10 years by September 2017. That means, if you’re buying a house today, you may want to ask yourself if it’ll still be the right house for you in a decade. https://www.firstam.com/news/2018/homeowners-stay-in-their-homes-despite-equity-20181018.html?utm_source=AKZO+Media+Subscribers&utm_campaign=4bcfbcdcc8-EMAIL_CAMPAIGN_2019_01_14_08_55&utm_medium=email&utm_term=0_134f701abc-4bcfbcdcc8-276542805
Spring is the busiest season for home buyers. Naturally, there’s a lot of analysis of buying conditions as it approaches. Things like mortgage rates, the economy, prices, for-sale housing inventory, and home buyer demand can all be used to predict how busy or slow the season will be. One early sign came with this week’s Applications Survey from the Mortgage Bankers Association. The survey measures demand for refinance and home purchase loans. The most recent results show a significant surge in demand over the previous week. In fact, total mortgage loan demand was up 13.5 percent (seasonally adjusted) from one week earlier and requests for loans to buy homes was 11 percent higher than the same time last year. Mike Fratantoni, MBA’s senior vice president and chief economist, said the spike might be a hopeful sign. “Uncertainty regarding the government shutdown, slowing global growth, Brexit, a more patient Fed, and a volatile stock market continued to keep rates from increasing,” Fratantoni said. “The spring home buying season is almost upon us, and if interest rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.” More here.
Builders create the homes we buy and live in, but they also serve another important purpose. They are a good barometer for where the real estate market is heading. After all, it’s their business to determine whether or not people are buying homes. When builders are confident, there’s likely a good reason for it. According to the National Association of Home Builders’ most recent Housing Market Index, builder’s confidence has increased in January. The NAHB’s index measures builder confidence on a scale where any number above 50 indicates that builders view conditions as positive. In January, it increased two points to 58. Randy Noel, NAHB’s chairman, says builder sentiment is high for a number of reasons. “The gradual decline in mortgage rates in recent weeks helped to sustain builder sentiment,” Noel said. “Low unemployment, solid job growth, and favorable demographics should support housing demand in the coming months.” In other words, builders expect home buyer demand to remain high going into this spring’s sales season. More here.