Buying a home means making an investment in the real estate market. While it may not be your main motivation for home buying, there’s a high chance that you’ll see a return on investment. It’s among the reasons that homeownership has retained its appeal over the years. New numbers from ATTOM Data Solutions show that an increasing number of homeowners are benefitting from their home purchase. Their Year-End 2018 U.S. Home Equity & Underwater Report shows that in the fourth quarter of 2018, more than 14.5 million properties were considered equity rich, which means that the loans used to purchase the property are 50 percent or less than the estimated value. In short, an increasing number of American homeowners are seeing their investment grow. Todd Teta, ATTOM’s Chief Product Officer, says that in addition to increasing values, homeowners are seeing their equity grow because they’re staying in their homes longer. With homeowners staying put longer, homeownership equity will most likely continue to strengthen, Teta said. The rise of equity rich homeowners also coincides with a dramatic decline in the number of seriously underwater properties, which have dropped from nearly 30 percent in 2012 to just 8.8 percent at the end […]
Last year’s housing market had its challenges. There was plenty of interest from home buyers, but too few homes for sale and high prices dampened some of the enthusiasm. This year, Americans may be feeling more optimistic, according to the most recent Home Purchase Sentiment Index from Fannie Mae. In addition to an 8 percent increase in the number of respondents who say their income is substantially higher than it was last year, there are also a declining number who feel home prices will keep rising. Essentially, consumers feel more confident in their money and see affordability conditions starting to improve. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says the boosted optimism and more favorable conditions may help home sales this year. Overall, these results are in line with our forecast that, amid improving affordability conditions, home sales should stabilize in 2019 after declining last year for the first time in four years. More here.
Fannie Mae’s quarterly Mortgage Lender Sentiment Survey asks senior mortgage executives for their perceptions of the market and their forecast for the future. According to the most recent release, mortgage lenders point to an insufficient supply of homes available for sale as the primary reason for slow home sales growth last year. In fact, 48 percent of responding lenders said that too few homes for sale held home buyers back, while higher prices was also a commonly cited factor. Similarly, when asked for suggestions for what could be done to improve affordability, almost half said increasing the supply of housing stock. In short, mortgage execs see low housing inventory as the market’s biggest issue. This isn’t a surprise. There’s been a lower-than-typical number of homes for sale in recent years, which increases competition and pushes home prices upward. If more homes get built, it could help provide some relief to home buyers this year. More here.
There’s a fairly common misconception that you’ll need a 20 percent down payment before you can buy a house. It’s recommended since it’ll help you avoid paying mortgage insurance, reduce your monthly payment, and get you a lower mortgage rate. But, depending on the terms of your loan, the amount of money you need to put down is flexible. So, what do most home buyers put down and how do they get it? According to a recent report by Zillow, just 43 percent of home buyers nationally put down 20 percent or more, which means many homebuyers opt for a smaller down payment. Seventy percent of buyers said they used savings as part of their down payment. Proceeds from a home sale and gifts from family or friends were also popular sources for down payment funds. Other sources included investments and retirement accounts. In short, the amount and source of your down payment will be unique to your financial situation and the home you’re hoping to buy. It’s important to go over how much you can afford to put down and what costs will be associated with a smaller investment. Your down payment will have a long-term effect on your […]
When surveyed, Americans who currently don’t own a home consistently say they’d like to buy one someday. For example, the National Association of Realtors’ Housing Opportunities and Market Experience survey asked non-homeowners whether homeownership is part of their American Dream, and 75 percent of respondents said it was. This means there are a lot of people who’d like to buy a home. What factors influence their decision to buy now or wait? It may come as no surprise that money leads the list. Most non-homeowners, when asked why they don’t currently own a home, said they couldn’t afford a mortgage. Other reasons included needing the flexibility that comes with renting and a lifestyle that wasn’t compatible with ownership. Similarly, when asked what might spur a future decision to buy, respondents said that having more money would motivate them to become a homebuyer. But an improved financial situation wasn’t the only thing that could encourage them to buy. An almost equal number of respondents said a lifestyle change like marriage or retirement might push them to pursue homeownership. More here.
Demand for mortgage applications saw a dramatic jump last week, according to new numbers from the Mortgage Bankers Association. Overall, application demand was up 23.5 percent from one week earlier. A large share of the rebound was from homeowners looking to refinance now that rates have fallen to their lowest level since last February. Though much of the surge was from refinance activity, home purchase loans also had a good week. Joel Kan, MBA’s vice president of economic and industry forecasting, said purchase activity rebounded after an end-of-the-year slump. “Purchase applications had their strongest week in a month, finishing over 4 percent higher than a year ago, as both conventional and government purchase activity bounced back with solid gains after a sluggish holiday season,” Kan said. Though the gains were impressive, the week’s results follow an unusually slow holiday season and include an adjustment for the New Year’s Day holiday. Going forward, there is some concern that the government shutdown and stock market volatility may negatively affect housing market activity, but lower mortgage rates and surging demand are an encouraging sign to start the year. More here.
Don’t like your kitchen, but can’t afford a total makeover? You can still spruce up your kitchen without spending a fortune. A little paint and some new lights can go a long way without breaking your budget. Here are some do-it-yourself tips https://www.ahs.com/home-matters/cost-savers/tackling-kitchen-makeover-on-budget
According to the Bureau of Labor Statistics, import prices increased by 0.5% in September. This breaks a recent trend, as the summer months saw import prices going down instead of up. However, an increase of half of a percentage point isn’t something to worry about quite yet. The effects of the new tariffs between the U.S. and China remain to be seen as the goods sold between the two countries adjust to increased taxes. This increase was led almost entirely by higher fuel prices, which increased by 3.8% last month. Nonfuel imports such as food, industrial supplies, and finished goods had little or no change. Read the full report here. Meanwhile, the Bureau of Labor Statistics took a closer look at August unemployment. The average is still 3.8%, however that doesn’t tell the full story. Many metropolitan areas had an even lower unemployment rate, while others had it higher. In fact, 57 metropolitan areas had an unemployment rate that was lower than 3 percent. Most of these were across the Midwest, but there were others scattered across the country as well. There were only 5 metropolitan areas with an unemployment rate of over 7%, which were all in California and Arizona. […]
Home prices have been increasing for a while. 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. While overall home prices are still increasing, more and more homes are dropping their prices after they have bid too high. That’s encouraging news for hopeful home buyers who have been keeping an eye on affordability conditions. Despite price reductions hitting their highest level since 2014, that doesn’t mean every neighborhood is part of the trend. For example, there are more reductions seen at the higher end of the housing market than in more affordable price brackets. 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 home buyers. That’s why potential home buyers should do some research on their preferred neighborhoods and get an idea of where […]
The U.S. Bureau of Economic Analysis just released their third and final estimate of second-quarter growth. The Gross Domestic Product (GDP) of Q2 of this year was 4.2%, the largest increase since Q3 2014. While this estimate remains unchanged from the previous one, this is still good news as it shows more certainty in strong economic growth. The acceleration in real GDP growth in the second quarter reflected accelerations in personal consumption expenditures (PCE), exports, federal government spending, and state and local government spending, as well as a smaller decrease in residential fixed investment. These movements were partly offset by a downturn in private inventory investment and a deceleration in nonresidential fixed investment. Imports decreased in the second quarter after increasing in the first, likely due to fears of new tariffs. Although the end of the third quarter is already upon us, predictions still vary greatly and we won’t see any reliable data until later in the month. https://www.bea.gov/news/2018/gross-domestic-product-2nd-quarter-2018-third-estimate-corporate-profits-2nd-quarter-2018