When asked, most Americans who don’t own a home say they’d like to become homeowners someday. Regardless of current market conditions or the state of the economy, the desire to own a home endures. Part of this is because it helps to build wealth. The other part is homeownership’s long-cemented status as a key element of the American dream. So what’s keeping aspiring homeowners from pursuing their dream? One main factor is coming up with a down payment. The down payment is among the biggest obstacles that keep people from home buying: the traditional 20 percent down payment can be difficult to save up for. So how long does it usually take to save for one? According to a recent analysis, someone making the median income and saving 10 percent of their earnings each month would take about seven years to save enough for a down payment on the typical American home. Furthermore, since home prices have grown faster than incomes over the past few decades, the amount of time it takes has been increasing. Obviously, if you already have money saved up or if you can save more than 10% of your income, that time will be shorter. Fortunately, […]
Affordability is always a top concern for people thinking about buying a house. Of course, there are other factors that are important when deciding to move or not. But what you can or can’t afford is 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. And affordability is always changing. 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 its largest year-over-year gain in five years. This is important because in today’s market, home price increases are being driven by the low inventory of for-sale homes. In other words, since there are more home buyers than homes, sellers can demand a higher price. As more homes become available, home 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 is showing signs of additional gains means there may be relief on the way for […]
Deciding to buy a house is mainly a financial 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 are moving higher and making it less affordable to buy a home. And yet, home buying demand remains high. Why? Because people feel more secure in their financial situation due to a stronger economy and job market. While homes may be more expensive, potential homebuyers are making more money as well. 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 home 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 […]
Naturally, potential home buyers become more concerned about affordability conditions as prices rise. And since the past few years have seen that happen, there’s been increasing concern about whether or not now is a good time to buy a house. That’s not to say there hasn’t been demand for homes. In fact, there are plenty of interested home buyers and not enough homes to accommodate them, which is why prices have been rising in the first place. But recently, there’s been more data suggesting that home prices are beginning to soften. In fact, one recent report shows that 26.6 percent of homes listed for sale in September dropped their price, which is a nearly 5 percent increase from the same time last year. That’s good news for home buyers, as is the fact that price drops have been showing year-over-year improvement since the end of March. Affordability may, once again, be moving in a more balanced direction and one that benefits home buyers. More here.
When it comes to real estate, most people know that location is key. Market conditions differ from one neighborhood to the next. But location isn’t the only thing affecting the conditions you’ll encounter when shopping for a house to buy. Your price range will also have something to do with it. Luxury homes aren’t simply more expensive; they’re in a completely different market than regular homes. The National Association of Realtors’ consumer website recently released its 2018 Luxury Home Index and the results show that luxury home buyers face a far different market than home buyers who are looking for a more affordable home. That’s because, while overall home price increases are showing signs of slowing down, the luxury home market is gaining speed. In fact, according to the index, there are a rising number of areas with double-digit price growth from the same time last year. In Sarasota, the nation’s fastest-growing luxury market, prices are up 21 percent from last year. Another difference between the overall market and the luxury market is the fact that higher-end homes stay on the market longer. Luxury homes in the 90 counties analyzed were on the market a median of 121 days. More here.
Choosing a house to buy is an important decision. After all, you’re committing a lot of money and several years of your life to a particular property. And so, home buyers tend to know what they want, whether it be a large kitchen, an appealing outdoor space, or an ample amount of storage. However, the large majority of home buyers spend too little time looking at the neighborhood of their potential home. And, make no mistake, the neighborhood you move to will play an essential role in how much you enjoy your new home. Surrounding amenities, schools, and safety are just a few of the factors that can lead to a case of buyer’s remorse. And, according to a recent survey, there are lot of home buyers who’ve experienced just that. In fact, 36 percent of respondents said they’d have chosen a different neighborhood had they known more about the one they moved to. The reason this is so common is because most home buyers do very little neighborhood research before purchasing their home. For example, less than half of recent home buyers searched photos of different parts of the neighborhood, visited hot spots, researched police reports, or took a […]
Consumer sentiment in the U.S. was opposite of expectations in the final reading of August The survey considers 500 consumers’ outlook on economic prospects. The index has slumped since March when it reached its highest level since 2004 with a reading of 101.4. Consumer sentiment in the U.S. was opposite of expectations in the final reading of August, rising slightly rather than further weakening as economists predicted. The University of Michigan’s monthly survey of consumers hit 96.2 in the final reading of August, better than the drop to 95.5 expected from economists polled by Reuters. Sentiment among consumers fell to 97.9 in July, from 98.2 in June, as a result of fears over the impact of tariffs on the domestic economy. “Although there was a small uptick in late August, consumer sentiment remained at its lowest level since January,” Richard Curtin, chief economist for The University of Michigan’s survey, said in a statement. “These results stand in sharp contrast to the recent very favorable report on growth in the national economy.” Curtin said consumers have “luckily” not yet interpreted the current inflation rate “as a significant source of erosion in their living standards or as a cause to reduce their […]
Mortgages originated to finance apartments and other income-producing properties managed to generate a small year-to-year increase in the first half, even though there are declines in some parts of the market. A 2% year-to-date increase puts commercial and multifamily mortgage originations on track to at least match 2017’s volume, in line with the Mortgage Bankers Association’s projections. “Commercial and multifamily real estate borrowing and lending continue to track with last year’s level,” Jamie Woodwell, the MBA’s vice president for commercial real estate research, said in a press release. “Investor demand for multifamily properties and hotels are helping push originations higher.” Hotel originations are up 31% year-to-date and multifamily loans are up 17%. Fannie Mae and Freddie Mac are supporting multifamily with a 14% increase in activity over last year through the first half. While certain multifamily submarkets could experience moderation, multifamily overall is expected to continue to see strong demand through year-end and into early 2019, according to a separate midyear forecast by Freddie Mac. Industrial originations are on par with last year, according to the MBA. But there are declines in the following sectors: office (3%), retail (11%) and health care (30%). Like the government-sponsored enterprises, life insurance companies are […]
Published 8:30 AM ET Wed, 15 Aug 2018 Reuters U.S. retail sales rose more than expected in July as households boosted purchases of motor vehicles and clothing, suggesting the economy remained strong early in the third quarter. The Commerce Department said on Wednesday retail sales increased 0.5 percent last month. But data for June was revised lower to show sales gaining 0.2 percent instead of the previously reported 0.5 percent rise. Economists polled by Reuters had forecast retail sales nudging up 0.1 percent in July. Retail sales in July increased 6.4 percent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales advanced 0.5 percent last month after a downwardly revised 0.1 percent dip in June. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Core retail sales were previously reported to have been unchanged in June. Consumer spending is being supported by a tightening labor market, which is steadily pushing up wages. Tax cuts and higher savings are also underpinning consumption. July’s increase in core retail sales suggested the economy started the third quarter on solid footing after logging its best performance in nearly four years in the second […]
by Jann Swanson Aug 16 2018, 2:14PM Loan performance continued to improve in the second quarter. The overall delinquency rate on one-to-four-unit residential properties fell to a seasonally adjusted rate of 4.36 percent of all loans outstanding at the end of that period, a 27-basis point (bp) decline from the first quarter of this year. The National Delinquency Survey conducted by the Mortgage Bankers Association (MBA) found delinquencies in all stages were lower than during the first quarter; the 30-day delinquency rate dropped 2 bps while the 60-day and 90-delinquency buckets dropped by 8 and 18 bps respectively. The overall rate, however was up 12 bps from the second quarter of 2017. The delinquency rate includes mortgage loans that are at least one payment past due but does not include loans in the process of foreclosure. The share of those loans at the end of the second quarter was 1.05 percent, down 11 bps from the first quarter of 2018 and 24 bps lower than one year ago. This was the lowest foreclosure inventory rate since the third quarter of 2006. Foreclosure starts were also lower, dropping by 4 bps quarter-over-quarter to 0.24 percent, the lowest level since the second […]