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.
New numbers from the National Association of Realtors show that sales of previously owned homes fell 1.2 percent in January from the month before. It was the third consecutive monthly decline. Among the country’s four major regions, only the Northeast saw an increase in sales activity. In addition to rising inventory, home price increases were the slowest in six years and homes were on the market for an average of 49 days. This is longer than it was at the same time last year, when most listed homes were selling in just 42 days. Essentially, spring home buyers may find buying conditions to be more favorable than expected. NAR President, John Smaby, said that slower sales is good news for home buyers. Decelerated sales and increases in inventory will work in favor of potential home buyers, putting them in a better negotiating position heading into the spring months.
A recent survey by Zillow asked 100 real estate economists and experts for their housing market predictions. Though they had varied views on topics like mortgage rates and home values, they almost unanimously agreed on one thing: homeownership A full 88 percent of responding panelists said that they expect the homeownership rate will be higher in five years than it is now and an almost equal amount said it will be improved in just two years. Why is this important? Following the foreclosure crisis and housing crash, the homeownership rate – which had peaked in 2006 – began to fall. And while it fell just 6 percent from its high, and only 2 percent from its historical average, it was a reflection of growing uncertainty among Americans. Buying a house, which had traditionally been seen as part of achieving the American dream, had lost some of its appeal. Since then, however, both the homeownership rate and housing market confidence have begun to rebound. According to the survey, an influx of first-time home buyers over the next five years will help further improvement. More here.
For many years following the housing crash, home buying conditions were excellent. Home prices had plummeted and mortgage rates were at historic lows. It was a home buyer’s market and a good deal for anyone who could take advantage. However, since prices had fallen so far, many homeowners who wanted to make a move would have to sell their house for less than they paid for it. But these days, those same homeowners have seen their home’s value rebound and maybe even exceed what it was before the crash. That means, though buying conditions aren’t what they were then, conditions have improved significantly for homeowners who are looking to sell. According to Fannie Mae’s monthly Home Purchase Sentiment Index – which measures Americans’ feelings about the housing market, economy, and their personal financial situation – survey respondents have noticed. The most recent results show an increase in the number of respondents who said it was a good time to sell. The flip side, of course, is that a decreasing number said it was a good time to buy. More here.
There are many reasons someone might want to shop for a home outside of their immediate neighborhood, including a new job opportunity or retirement. But where are the most popular destination for out-of-state movers? According to United Van Lines 42ndAnnual National Movers Study, Vermont is the state with the highest percentage of inbound moves. Though the Northeastern state leads the list, most of the states seeing a high percentage of out-of-state migration are in the South and West. States like Oregon, North Carolina, Nevada, Washington, South Dakota, and Arizona are attracting more Americans than locations in the Midwest and Northeast. Michael Stoll, an economist and professor in the Department of Public Policy at the University of California, Los Angeles, says there are reasons these places are more popular. “The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factors like job growth, lower costs of living, state budgetary challenges, and more temperate climates.” More here.
Naturally, home prices are a top topic for anyone buying or selling a home in the coming year. So what’s the forecast for 2019? There’s good news and bad. For starters, CoreLogic’s most recent Home Price Index says prices are actually expected to have fallen from November to December. However, year-over-year numbers show they’ve risen by 5.1 percent from 2017. That means, values are moderating in the near term but are still increasing overall. Further, they expect that they’ll continue to head upward. That’s the bad news. The good news is that a rising number of available homes for sale is expected to slow the rate of increase. In fact, CoreLogic projects home price growth to slow down to only 4.8 percent by November 2019. While the improvement may seem slight, the fact that price increases are slowing down is good news for home buyers this year. More here.