How much money you spend is dependent on how much money you have. This is a simple equation and one that explains the current housing market. Though home prices have gone up recently, home buyer demand remains high. The explanation for this is that the economy is stronger and people feel more secure financially. In short, they have more money so they’re able to afford more. Fannie Mae’s most recent Home Purchase Sentiment Index sheds light on this. The survey asks Americans for their perception of the current housing market, prices, rates, the economy, etc. According to the most recent results, 30 percent of Americans who say it’s a good time to buy a house cited favorable economic conditions as the reason they felt like the time was right. This is a good indication that financial confidence is helping to fuel interest in buying a home. However, though the economy may be helping keep buyers interested, affordability conditions are having an effect. In fact, the overall index fell 2 points from the month before with five of the six components seeing declines. More here.
On Friday, the Bureau of Labor Statistics released their report on October employment and earnings. According to the report, the average private payroll increased by 5 cents over the month. There was an 83 cent increase in earnings from the same time last year, which is 3.1% – the highest year-over-year gains since 2009. This isn’t just because people are working more, either: the average length of the workweek only increased by 0.1 hours per week in October. In other words, the average worker is earning more per hour. Unemployment stayed virtually the same at 3.7 percent. You can read the full report here: Meanwhile, goods and service deficit ticked up last month by $0.7 billion, according to the U.S. Bureau of Economic Analysis. Exports increased by $3.1 billion, but not as much as imports which went up by $3.8 billion. The U.S. trade deficit is now at $54.0 billion, and has been increasing since June of this year. The increase in imports to the U.S. was led by capital goods such as computers and telecommunications equipment. The increase in exports from the U.S. was led by industrial supplies, especially petroleum. You can read the full report here:
First-time home buyers are important to the health of the housing market, since they typically account for around 40 percent of the homes sold. Although that number has fallen in recent years, a stronger economy and job market has led to increasing demand from younger home buyers. According to one recent survey, an overwhelming majority of Americans between the ages of 18 and 34 say they want to own a home, if they don’t already. The youngest respondents were among the most enthusiastic. Generation Z – which includes Americans between the ages of 18 and 24 – were more than twice as likely to have started, or plan to start, saving for a home before the age of 25 than previous generations. Also, two in five Gen-Z participants said they hope to become homeowners by that age. This shows that members of Generation Z are saving up for down payments as well as building credit to be eligible for mortgage loans in the near future. While they want to become homeowners, they don’t necessarily have the same motivations as previous generations. Fewer of them said they wanted to become homeowners “to live the American Dream” or because they think […]
The number of job openings reached a series high of 7.1 million on the last business day of August, the U.S. Bureau of Labor Statistics reported Tuesday. Over the month, hires and separations were little changed at 5.8 million and 5.7 million, respectively. Within separations, the quits rate was unchanged at 2.4 percent and the layoffs and discharges rate was little changed at 1.2 percent. Meanwhile, the job openings rate was 4.6 percent, up 0.1 percent from last month. The largest increases were seen in transportation, healthcare, and professional services. The number of new hires in August reached a series high of 5.8 million, and the hires rate was 3.9 percent. Overall, employment rates and new hires continue to increase across all job categories and all regions. However, these numbers are expected to slow down as we approach full employment. You can read the full report here
A “blind” or “sight-unseen” offer on a home is when a home buyer makes an offer before they have even seen the house in person. Why would anyone want to buy a house they haven’t even visited yet? In a competitive market, homes are being sold quickly and home buyers might not have the time to visit the house before it gets swept up, especially if it’s far away. While blind offers have been common in the last few years, recent data shows it’s becoming less common. According to a recent survey, the number of home 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 home buyers are feeling some relief and aren’t feeling pressured to move as quickly as they were when inventory was tighter. While this is encouraging news for potential home 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.
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 six elements are water efficiency, energy efficiency, indoor air quality, materials, operations, and maintenance. Put simply, retrofitting 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 home 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. https://www.prnewswire.com/news-releases/green-home-improvements-can-pay-off-appraisal-institute-300724057.html?utm_source=AKZO+Media+Subscribers&utm_campaign=41f0e7f842-EMAIL_CAMPAIGN_2018_10_04_08_47&utm_medium=email&utm_term=0_134f701abc-41f0e7f842-276542805
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. Price cuts are encouraging news for hopeful home buyers who have been keeping an eye on home prices. In fact, price reductions have hit their highest level since 2014. The luxury market is being affected most by this 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 cheaper locations. Potential home buyers should do some research on their preferred neighborhoods and get an idea of what they can afford. https://www.prnewswire.com/news-releases/trulia-price-cuts-reach-highest-level-since-2014-300729278.html?utm_source=AKZO+Media+Subscribers&utm_campaign=e9bf2990d9-EMAIL_CAMPAIGN_2018_10_11_08_00&utm_medium=email&utm_term=0_134f701abc-e9bf2990d9-276542805
Deciding to buy a house is mainly a financial decision. You either feel secure enough financially to make a move or you don’t. Survey after survey shows Americans think home prices are moving higher and making it less affordable to buy. Despite this, demand for homes reminds high. This is 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 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.” http://fanniemae.com/portal/media/corporate-news/2018/september-home-purchase-sentiment-index-6772.html?utm_source=AKZO+Media+Subscribers&utm_campaign=b806c45fd5-EMAIL_CAMPAIGN_2018_10_09_09_03&utm_medium=email&utm_term=0_134f701abc-b806c45fd5-276542805
GDP is estimated to have grown by 3.5% in the third quarter of 2018, according to the Bureau of Economic Analysis. While this is down from 4.2% from the second quarter, it’s still higher than any other increase in the last 4 years. In other words, GDP slowed down from the last quarter but still had a relatively high increase. This deceleration was largely due to fewer exports and less nonresidential investment in the third quarter. Personal income went up by $180 billion in Q3, roughly the same as last quarter. This was driven by better wages and salaries, while dividend income slowed down. In the meantime, personal savings dipped down a bit from last quarter, from $1.05 trillion to just under $1 trillion. The savings rate also had a small decrease from 6.8% in Q2 to 6.4%. So, while income stayed the same, people are saving a bit less money than they did last quarter. Overall, the hot economic gains seen over the summer have started to cool off, but GDP and income are still at very healthy levels. You can read the full report here
A home’s price isn’t the only factor to consider when calculating the cost of a home. Things like mortgage rates, potential maintenance and upkeep, property taxes, and insurance are all part of the equation. However, the listed price is still the main factor, and it’s the easiest to measure. Because of this, prospective homebuyers are always thinking about where home prices are headed. New numbers from ATTOM Data Solutions offer homebuyers some good news. According to their Q3 2018 U.S. Home Sales Report, home prices only rose 1 percent in the third quarter and are now up 4.8 percent from last year. That’s the slowest price appreciation since 2016. The report found that price increases slowed in 74 of the 150 metro areas analyzed, including Chicago, Los Angeles, Dallas-Fort Worth, Houston, and Miami. Despite the encouraging news, however, not all housing markets are cooling down. In fact, some metros continue to see double-digit gains year-over-year, while others are seeing as little as 3% or lower price gains. Housing markets differ vastly from metro to metro, so it’s best to research the area. More here.